Eucalyptus and Timber plantation on Wastelands in Northern India

Chandra Mohan Shukla 1


Tree farming projects under farm forestry being implemented in North-Western region of the country with a sizeable financial support have made considerable impact on economy of concerned states, specially with regard to assured supply of raw material, conservation of already scarce forest resources, employment generation and improvement of the environment. Farmers participating in the programmes have made handsome returns.

Another project of eucalyptus and timber plantation on wastelands has been under implementation for about a year. Long-term loans are provided to farmers to get decent returns. Plant saplings, planting techniques and technical assistance is provided by forest department of the state government. On the basis of estimated average unit cost per hectare plantation, the loans are provided to farmers by the state land development bank through its primary agricultural rural development banks under a federal structure. Farmers have to provide to the bank the mortgage of land as security against loan. The loans disbursed by the bank are fully refinanced by the apex refinancing agency (90 percent) and the state and central governments remaining (10 percent). In this way technical and financial support to farmer is provided by the governments and the banks in a coordinated manner. Loan is repayable at a concessional rate of financing. After harvesting at the end of the tenth year, the produce is purchased as the raw material by the paper mills. Eucalyptus can coppice for three rotations i.e. after cutting the original crop. The coppice crop will give an extra income to the farmer.

The project is an attempt towards locating ways and means for the best possible utilization of wastelands, afforestation for life-support system and regeneration of trees, while providing employment and good returns to farmers thereby reducing their poverty.


Tree cover all over the world and more so in India has been reduced by alarming proportions, sites have been denuded and water and wind erosion have affected vast stretches of land. If we are to leave a legacy other than a ravaged environment incapable of sustaining human life, this trend has to be reversed. Quite apart the indirect ecological benefits, tree farming is an economically viable land-use activity and has the potential to convert India into "Wood Basket" of the world.

India is the world's second most populous country with a population of over a billion growing at an annual rate of about 2 percent. Agriculture is the largest sector of the Indian economy and contributes more than one third of the gross national product. It engages about two third of the labour force. The average farm holding is hardly 2 hectare. Farmers with less than 1 hectare of land account for majority of all holdings. About 30 percent of the rural population are landless agricultural labourers.

While this is the scenario on one hand, there is existence of waste land due to reckless cutting of trees or deforestation, large scale soil erosion due to natural agencies and man's activities, desertification or expansion of deserts to other areas etc. on the other hand. To reduce the area under waste land, measures like afforestation or planting of more trees, reducing uncovered and exposed lands by planting tall trees like eucalyptus to break the speed of winds, grasses etc. which bind the soil, make it more compact and check desertification, are necessary. Forests and forestry projects help in maintaining the ecological balance and absorb carbon dioxide, accumulation of which has already increased the temperature of the atmosphere. Rise in atmospheric temperature at the global level has led to the melting of ice caps and rise in sea level, endangering low lying thickly populated parts of the world. Forestry projects in a way also help raising the level of precipitation by increasing transpiration to minimize the incidence and severity of droughts.

In the circumstances, the forestry activity especially on waste lands is the need of the hour as a means of enhancing rural incomes and employment through agricultural diversification particularly targeting on rural areas where poverty and under-employment are concentrated.

A pertinent observation (Vandana Shiva, 1995, p. 77) made "The main thrust of conservation struggles like Chipko is that forest and trees are life-support systems, and should be protected and regenerated for their biospheric functions. The crisis mind on the other hand sees the forest and trees as weed, valued commercially, and converts even afforestation into deforestation and desertification. From life-support systems, trees are converted into green gold - all planting is motivated by the slogan, `Money grows on trees.' Whether it is schemes like social forestry or wasteland development, afforestation programmes are conceived at the international level by `experts' whose philosophy of tree-planting falls within the reductionist paradigm of producing wood for the market, not biomass for maintaining ecological cycles or satisfying local needs of food, fodder and fertilizer."

In the light of above observation, an example of forestry project on wastelands in several districts of Haryana state in northern India is highlighted. In this project, an endeavour is made to demonstrate that a coordinated approach by the small land owners of wastelands, the officials of the forest department of the state government and the officials of the financing institutions would result in the best possible utilization of wasteland, afforestation for life-support system, regeneration of trees planted under the project and simultaneously providing extra employment and good returns to the farmers thereby reducing their poverty.

Tree farming projects being implemented in the north-western region of the country with a sizeable financial support have made considerable impact on the economy of concerned states, specially with regard to assured supply of raw material, conservation of already scarce forest resources, employment generation and improvement of the environment. Farmers participating in the programmes have also made handsome returns.

Eucalyptus are used as timber and poles. They have excellent wood for pulping for paper and rayon. Eucalyptus wood is heavy and is, therefore, good as firewood and for making charcoal. Other timber i.e. kikar, shisham and kainth etc. are used for making building material which are very useful for construction of building and other purposes. Eucalyptus is good for making hard board and particle boards. The leaves of several species of eucalyptus are distilled for oil. Yield of honey can be increased in the neighbourhood of eucalyptus plantation.

In India, eucalyptus was first introduced around 1790, when a number of species were planted in the erstwhile state palace-garden at Nandi Hills near Mysore in southern India. Ecalyptus territicornis and eucalyptus cameldulensis have been planted with a view to gain, economically.

Several areas in the region have climate suitable for the plantation of eucalyptus. The plantation of eucalyptus has become familiar. In the present situation the eucalyptus plantation are also coming up, planted by small and marginal farmers, as a block plantation on boundaries of the fields. The soil is clay loam to sandy loam with good texture are available in the said areas. The undulated tracts are also existing nearby Shivalik hills. The drainage system is quite well alongwith the topography of the area.


The object of the project is to provide long term credit facilities by the primary agricultural rural development banks to the farmers for plantation of eucalyptus and other timber trees for getting the best return from per unit of area.

The bank's assistance strategy in India is to support policies and investments that will encourage economic growth and social development in a context of macro-economic stability. The emphasis is on efficient resource allocation, increased efficiency in the public sector, and the appropriate targeting and delivery of support systems to the poor.

Climatic conditions are suitable for raising of eucalyptus plantation. Therefore, the area of 15 districts in the state of Haryana for the development of eucalyptus and timber trees is proposed to be brought under plantation in one year. The expenditure during gestation period upto 10 years will be given by the banks in the form of loan.

While the weaker section of the society will get employment, the erosion of soil also be minimized and air pollution will be reduced.

Physical and financial programme

Financial outlay and phasing of the project

The loan for the development of wasteland by this forestry project in the area of the 15 districts will be provided as mentioned in the table on the next page.

No. of units (hectare)

Rupees in lacs

Total financial outlay

Down payment 10%

Bank loan

NABARD refinance






The entire amount will be financed by the Haryana State Cooperative Land Development Bank by floating the special development debentures, which will be purchased by the apex refinancing agency i.e. National Bank for Agriculture and Rural Development (NABARD) with 90 percent and state/central government with 10 percent contributions.

Organisation and supervision

State Forest Department headed by the Chief Conservator of Forest is located at the state headquarters. At divisional level, the Divisional Forest Officer with Forest Range Officer and Forest Guard etc. are posted for the development and maintenance of forest. Any kind of technical assistance required on cultivation and maintenance of farm forestry, timber forestry can be had from the local officials. The managers and land valuation officers of the primary agricultural rural development banks are also required to be adequately trained in this type of financing. Apart from this, the officers from State Land Development Bank also supervise the execution of the project. Besides the research work, the agricultural universities offer graduate and higher degrees in the field and the qualified staff are recruited by the state government and the financing banks. They are trained periodically at the training institutes run by the state/central governments and the apex refinancing agency and the central banking institution of the country. These trained staff are able to meet the requirements under the project and provide the specialized extension services.

Availability of plant material

Forest department of state government makes arrangement for the supply of the plant material saplings to the farmers. So there is no difficulty in availability or procurement of saplings for planting.

Time of plantation

There are two seasons for planting for forestry which refer to rainy seasons i.e. the main season from July to September and during the spring season from February to March. However, in order to ensure higher survival/growth of plants, the plantations under the scheme are to be raised only during the rainy season. Accordingly, all the spade work relating to motivation, collection of loan application and necessary arrangement for plant material saplings is completed well in time so that the loan is disbursed during this period to enable the farmers who carry out arrangements of inputs and digging and filling of pits.

Planting techniques

Seedling contained in poly bags are planted. Small pits of 45 cm 3 size are dug at the given spacing. At the time of planting, the poly bags are cut open by a blade and the entire poly bag is removed carefully ensuring that the soil around the roots is intact. The plant along with the soil around is lowered down in the pit which is filled upto one fourth level, subsequently. Farm yard manure is applied and watering done profusely.

Beneficiaries to be covered under the project

All the farmers who desire to have the bank loans for plantation of farm forestry over a minimum of 0.2 hectare or a minimum 360 trees are considered eligible for getting the bank loan. In the interest of proper implementation of the project, however, preference is given to those cultivators who could forego pre-development income from the land brought under farm forestry.

Executing agency

The work at the field level will be executed through the concerned primary agricultural rural development bank staff with collaboration of the forestry department of the state. The necessary technical guidance and supervision is made available to the beneficiaries by the forest department. Existing state infrastructure, staff and facilities for forestry development are integrated in the implementation of the project. Monitoring of physical targets and collection of data on key indicators and targets during the project implementation is done by the financing banks and the forest department of the state government. Refinancing agency also undertakes such studies.

Loaning agency

The Haryana State Land Development Bank is the loaning agency which extended credit under this project through its primary agricultural rural development banks located in the project area.

Method of disbursement of loan

Scale of financing

The estimated average unit cost of one hectare plantation of eucalyptus with kikar plantation is Rs. 31,000.

Year Item of expenditure Amount in Rupees

1 st Initial cost 21,332
2 nd Maintenance cost 7,698
3 rd Maintenance cost 1,194
Total 31,024

Security of loan

The loan sanctioned in the project is secured by the first mortgage of land of the borrowers and hypothecation of trees. The eligibility is determined at 60 percent of the assessed value of the unencumbered land and under charge with the primary agricultural rural development banks.

Repayment period

Taking into consideration the economics of the eucalyptus along with kikar plantation under the project area conditions, it is considered fit to harvest at the end of the tenth year from the date of plantation. Therefore, income can be raised after the tenth year. Hence, the entire amount of loan along with interest is to be recovered at the end of the tenth year.

Economics of the project

It has been assumed that

Marketing of eucalyptus

Forest department of the state is able to meet only 30 percent demand of the paper industries. Thus, there is no problem for marketing of eucalyptus which is the basic raw material for the paper industry. Other timber like kikar will be used as timber for construction of building material and eucalyptus has also been sold as wooden poles. The expected yield and income from one hectare of plantation is given in the Table 2.


The project, therefore, is an attempt towards locating ways and means for the best possible utilization of wastelands, afforestation of life-support system and regeneration of trees i.e. the eucalyptus has vigorous coppicing power. It can coppice for 3 rotation i.e. after cutting the original crop, we get the coppice shoot which when tended become trees. Thus coppice crop will give an extra income to the farmer. While the project provides employment and good returns to the farmers thereby reducing their poverty, it also demonstrates a well coordinated effort amongst farmers, bank and government officials.

Table 1 - Proposed unit cost of eucalyptus and kikar scheme for waste land development (1 hectare)

No. of plants : Eucalyptus - 1600 and Kikar (on fence) - 200
Espacement : Eucalyptus - 3 m x 2 m; Kikar - 2 m
Casuality replacement : 20 percent
Survival : 80 percent
Year of harvest : 10 th year
Wage rates : Rs. 62.50/MD

Sr. No.

Name of Development








Site preparation







Ploughing of the area







Alignment and staking







Trench-cum-mound fencing







Digging of pits and refilling of pits after mixing farm yard manure, fertilizer and insecticide







Cost of farm yard manure including carriage







Cost of plants including carriage







Planting and replanting







Cost of fertilizer including application







Cost of insecticides including application







Weeding and soil working







Irrigation during stress period














Contingencies 10% of the above












or say 31,000

Table 2 - Eucalyptus and kikar scheme - Expected yield and income


1 hectare

Number of saplings planted

  • Eucalyptus
  • 1600

  • Kikar
  • 200

    No. of trees assumed for yield calculation

  • Eucalyptus
  • 1280 (80%)

  • Kikar
  • 160 (80%)

    (i) No. of good quality poles

    640 (50%)

    (ii) Fuel wood from remaining 640 eucalyptus

    640 x 60 kg. =38.4 MT

    (iii) Fuel wood from 160 kikar trees

    160 x 60 kg. = 9.6 MT

    Sale price of

  • Eucalyptus
  • Rs. 250 per pole

  • Kikar
  • Rs. 800 per MT

    Income from

  • Sale of eucalyptus poles
  • Rs. 1,60,000

  • Sale of fuel wood
  • Rs. 38,400


    Rs. 1,98,400


    Shiva, Vandana., 1995. `Staying Alive; Women, Ecology and Development in India', Kali for Women, New Delhi, 77 p.

    Gadgil, Madhav., Guha, Ramchandra., 1993. `This Fissured Land: An Ecological History of India', Oxford University Press, Delhi, 189 p.

    Shiva, Vandana., Sharatchandra, H.C. and Bandopadhyay, J., 1982. `Social forestry: No solution within the market place', The Ecologist, 12 p.

    Chandrasekhar, D.M., Krishnamurthy, B.V. and Ramaswamy, S.R., 1987. `Social forestry in Karnataka: An impact analysis', Economic & Political Weekly, 29 th Sept.

    Acknowledgement: The project discussed in the paper is a project currently under implementation by the Haryana State Land Development Bank in 15 districts of Haryana state of northern India and with full financial assistance by the National Bank for Agriculture and Rural Development and state/central government. The facts and figures used in the paper have been procured from these agencies.

    I am also thankful to Mr. Vinod Parshad for providing the secretarial assistance in the preparation of this paper.

    1 Former Manager, National Bank for Agriculture and Rural Development # 62, Sector 11-A Chandigarh - 160 011 India
    E-mail: cmshukla_62@yahoo.co.in