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With the increasing demand for non-wood forest products for medicinal purposes and due to its high scope for value addition, these products are increasingly extracted by local communities not only for subsistence use but also to generate cash income. This study explores the factors determining the dependence of local people on a protected forest area for commercial purposes, from a case study in India. The findings go along with that of similar studies that alternative income sources would greatly reduce the dependence on the forest. This paper computes present value of NTFP using the data from a household survey. The projected value for the population, which gives the opportunity cost of prohibiting the use of forest by the local people, would serve as a good indicator for the policy decision on compensation to be paid to the local people for relocating them from the forest area.


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