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Item Socio-economic Impacts of Forest Conservation on Peripheral Communities: Case of Knuckles National Wilderness Heritage of Sri Lanka(12th Biennial Conference of the International Association for the Study of Commons, Cheltenham England, July 14-18, 2008, 2008) Wickramasinghe, Kanchana; Steel, Paul; Senaratne, AthulaForest conservation generates significant economic benefits to the society. However, the conservation strategies should pay necessary attention to the resultant socio economic aspects. Otherwise; conservation efforts affect the welfare of peripheral communities due to restrictions on their livelihoods. The present paper intends to assess the socio-economic impacts of declaration of Knuckles Conservation Zone (KCZ) on the livelihoods of surrounding communities, using data and information collected through a household survey, focus group discussion, interviews and observations. The Knuckles National Wilderness Heritage (NWH) is an important natural forest in Sri Lanka, due to its richness in biodiversity, uniqueness in habitat diversity and being a vital catchment to the main rivers. The forest has greatly been threatened by the promotion of cyltivation of cardamom, which receives high prices in the international market and shifting cultivation that has resulted in a sizeable decrease in the forest cover. With the declaration of KCZ, shifting cultivation and cardamom cultivation were banned and access to forest products was restricted. Consequently, although conservation activities generated considerable environmental improvements, they caused direct negative impacts on the peripheral communities. The quantity and frequency of forest products harvested has declined due to limited access to the forest, causing income losses and affecting food security. The dependency on non timber forest products (NTFPs) as a source of income is much low according to this study finding, but the forest had played a major role as a subsistence source of food, wood, fuel wood etc earlier. The annual income loss due to banning of shifting cultivation and reduced harvesting of NTFPs is estimated around US$ 150 per household. Promotion of ecotourism activities, which are already in place, and creation of proper marketing channels for agricultural products is recognized as alternative ways to increase income, thus to improve the well-being of households. Villagers could also be allowed to harvest selected NTFPs, provided that sustainability of the forest is not affected. Therefore a mechanism should be created that communities are compensated through alternative income sources rather than depending on monetary compensations from the government thereby setting a useful example for the future conservation strategies of the country and elsewhere.