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Eucalyptus on farmlands in India: What went wrong?

N.C Saxena

N.C. Saxena, a forester from Uttar Pradesh. India, is currently based at the Oxford Forestry Institute, UK.

Until the mid - 1980s India was considered to be a farm forestry success story, with farmers planting trees to meet the market demand for poles, pulpwood and small timber. Many recent reports, however, show a significant decline in farmers' enthusiasm for farm forestry. This is largely owing to the unpopularity of Eucalyptus hybrid (Eucalyptus tereticornis) with farmers in the very states where it had been extremely sought after a few years earlier. This article discusses the reasons for farm forestry's decline, drawing on recent studies as well as primary data collected by the author from four villages of western Uttar Pradesh in northwestern India. Measures required to revive the farmers' interest in trees are also suggested.

Eucalyptus planted on boundaries reduced crop yield and produced poor-quality timber

Farm forestry means different things to different people. Ecologists and environmentalists see it as a superior land-use and land management system which combines conservation with production. Foresters tend to look at it as a potential line of defence against the depletion of forests under population pressure. Planners and donor agencies have viewed it as an answer to the rural need for fuel and fodder. However, farmers are not generally motivated by the "national" concerns of ecology, deforestation and fuelwood scarcity. They adopt a particular form of land use because it is perceived as having more potential for satisfying their family consumption and income requirements.

Farm forestry programme

When the National Social Forestry Project was started in India in the late 1970s, planners had hoped that farmers would grow trees to meet subsistence needs. However, the main motivating force behind the success of farm forestry in some areas of India during the early 1 980s was the possibility of growing wood for the market (Foley and Barnard, 1985; FAO, 1985). Eucalyptus hybrid (Eucalyptus tereticornis) [Ed. note: although popularly known as Eucalyptus hybrid, this species has been identified as a pure eucalyptus of unknown Australian provenance (FAO, 1979; Guhathakurta, 1978). The terms "species" and "hybrid" are used interchangeably in this article when referring to this phenotype.] remained the most favoured tree with the farmers because it grew straight, had a small crown- which allowed more trees to be planted per unit of area - and reduced shading when planted on field boundaries. It did not attract birds, was not as attractive as browse (hence it was easier to protect) and yielded straight poles for which there was perceived to be a good market demand. The 1988 United States Agency for International Development/World Bank evaluation of India's Social Forestry Project concluded: "Most of the districts of western Uttar Pradesh, central Gujarat, and eastern Rajasthan have transformed their farms and cropping systems to include large numbers of trees, despite the recent drought. Farm forestry has emerged as the most significant change brought about by this project" (USAID, 1988).

Of the estimated 2.5 million ha of land brought under farm forestry during the period 1981 to 1988, representing about 1.7 percent of the net cropped area in the country, more than two-thirds were planted with eucalyptus (Chambers, Saxena and Tushaar Shah, 1989). However, the trees failed to come up to farmers' expectations, both in yield and price, which led to indifference on the part of the farmers toward trees in general and eucalyptus in particular. For example, a study published by the Swedish International Development Agency (SIDA) commented: "Eucalyptus is practically dead in Haryana today. Farmers are uprooting it today with the same vengeance as the love with which it was planted. It eats into agricultural production and its prices are unremunerative (SIDA, 1990).

In Gujarat only 12 million eucalyptus seedlings were distributed in 1988, a year of very good rainfall throughout the country, compared with the peak distribution of 134 million in 1984 (GOG, 1989). In the four western Uttar Pradesh villages surveyed by the author in 198990, the total number of eucalypts planted by the 105 farmers interviewed in 1988 and 1989 fell to 5295 and 1027, respectively, compared with the 60 695 trees of the same species planted two years before (Saxena, 1990a). In Haryana, where the farm area under trees grew at a rate of 53 percent per annum between 1975 and 1984 (NCAER, 1988), only four million plants from nurseries could be sold in 1988, compared with 43 million in 1984 (Indian Express, 1 November 1988).

In its 1990 audit report on Uttar Pradesh, the World Bank admitted that ", many farmers are reluctant to get involved in the programme or reinvest in forestry activities once they have harvested the existing trees...recent evidence shows that the project's economic rate of return has been overestimated on two grounds: prices and yields...the market for forestry, products, including fuelwood, has been saturated in several areas covered by the project. This has resulted in a sharp decline in prices...20 to 50 percent less than those assumed at completion" (World Bank, 1990).

When planted in high-density woodlots, only the outer eucalyptus frees grew to commercially valuable diameters

As suggested by these citations, the farmers' disenchantment with eucalyptus can be attributed to four main factors: production problems; supply/demand imbalances; market inadequacies; and negative effects on agricultural production.

Production problems

Because of the rapid increase in demand for eucalyptus seedlings in the early 1980s, seed collection was not done properly either by the forest department or by private nurseries, and poor-quality seedlings were allowed to be planted (World Bank, 1988). Moreover, the genetic status and composition of the Eucalyptus hybrid available in India has suffered a gradual and continuous genetic deterioration over almost 150 years (Arnold et al., 1987). The poor genetic quality of the seed inevitably led to less than optimal yields. Performance could be improved if the unselected seed of the species now used were replaced by seed from a broad genetic base or from provenances selected to match specific site conditions or by other suitable eucalyptus species (Arnold et al., 1990). In addition, under the climatic and soil conditions prevailing in many areas of the country, intensive weeding and soil preparation were essential for good yields, but this requirement was frequently neglected by the farmers (Arnold et al., 1989).

Most importantly, to achieve overall targets, farmers were encouraged to plant eucalyptus at a density of more than 4000 seedlings per hectare; in bund plantations, the distance between trees was about one metre. These growing conditions led to a poor-quality product (Athreya, 1989; IMRB, 1989). This was an extremely important negative factor, as it was clear that the majority of trees planted under the farm forestry programme were being grown for sale rather than for household use.

Supply and demand imbalances

Initially, the eucalyptus crop from farms was envisioned as a source of poles for building or scaffolding, but the market was not able to absorb the volume of poles produced. Farmers looked for other outlets but, for the reasons mentioned in the previous section, eucalyptus grown by farmers unfortunately tended to have little value for use as timber, which requires trees of a bigger dimension and higher density than those available on farmlands with a short rotation period of five to seven years. Farm output was suitable for pulping, but most of the wood - based paper mills rely on subsidized wood from the state forest departments. Even when the mills were willing to buy from farmers there were problems related to the small volume of the farmers' production and the logistics of transporting the wood over long distances from many scattered locations.

As a last resort, much of the farm wood was sold as fuelwood for brick-making kilns or for domestic use (Saxena, 1990b). However, the lower costs incurred by fuelwood gatherers forced farm foresters to sell their produce at less than the social cost of replacing growing stock through investment in plantations. Therefore, its production on farms was not an attractive financial proposition.

Market inadequacies

Compared with markets for other agricultural products, wood markets are still not developed for farm supplies (Saxena, 1991a). The contrast between tree marketing and agricultural crop marketing is sharp. For marketing agricultural products, state governments have set up vast infrastructures: remunerative procurement prices are announced several months in advance of the crop; generous subsidies are built into the system of government purchase, which absorbs surplus production and stabilizes prices; market yards have been set up to reduce exploitation; and an entrepreneurial commission has been fixed.

Children removing bark from harvested eucalyptus timber for sale as fuelwood

None of these interventions have been made in tree marketing. On the contrary, markets for forest products are dominated by cartels, shrouded in secrecy and impeded by legal bottlenecks.

Whereas rural markets are small and localized, lack capital and, hence, buying capacity - as in most of the developing world (FAO, 1987) - urban markets are dominated by merchants dealing in construction timber supplied by government depots. Farmers, on the other hand, have no ready market. Legal restrictions on the transport of wood, designed to prevent illicit felling in government forests, act against the interests of producers and prevent them from bringing their produce to urban markets. With suppliers forced to wait for the buyers to come to them, these rigid laws act as a barrier between the producer and the market and add uncertainty, if not inequity, to sales transactions. Farmers' awareness about buyers, the prevailing market price and government rules is weak. As a result of these market imperfections, entrepreneurial margins are seemingly large, leading to high price differentials between what producers get and what consumers pay.

State intervention has thus constrained the evolution of private markets for farm wood, depriving producers of the true market potential (ORG, 1990). A study carried out in 1987 in Gujarat (Wilson and Trivedi, 1987) showed that, of the 45 producers who sold trees, only nine made a relative profit; 36 would have been better off sticking to agriculture. Jain (cit. FAO, 1988) reached similar conclusions in her studies of eucalyptus in the same state.

Negative effects on agricultural production

Many farmers planted eucalyptus on farm bunds, anticipating a good supplemental income after a few years with no loss of agricultural production. However, several studies indicate substantial decreases in agricultural production beginning in the third year, depending on soil and water conditions, spacing and location of trees and other factors. For example, according to Ahmed (1989), production losses resulting from eucalyptus cultivation in Haryana were nil in the first two years, 8 percent of the total output in the third and fourth years, 14 percent in the fifth and sixth years and 26 percent in the seventh and eighth years. After this, losses increased rapidly to nearly 49 percent for the ninth and tenth years.

Data collected by the author from four western Uttar Pradesh villages show that crop losses caused by bund planting ranged from two to eight times the total direct investment in tree cultivation. Losses were visible up to 10 m from the tree line. These losses drastically reduced the profits farmers were expecting from the sale of trees. The average benefit-cost ratio at a 15 percent discount rate would have been 9.2 without crop losses, but it came down to just below 2 when crop losses were taken into account. Therefore, although farmers were better off after planting eucalyptus, the reduced profit margin was not perceived to be sufficient to cover risks of production and fluctuating output prices (Saxena, 1991b).

Cow dung and agricultural waste continue to be the preferred fuels in much of India

Discussion and policy implications

The rapid depletion of nutrient reserves in the soil as a result of eucalyptus cultivation with a short rotation is a direct consequence of the eucalypt's rapid growth, but it would apply in much the same way to any other highly productive crop (Poore and Fries, 1985). Therefore, in India, where E. tereticornis has been grown in monoculture plantations which have very short rotation cycles and may suffer nutrient losses if the soil is not replenished through fertilization, farmers should increase the length of rotations and ensure that nutrientrich leaf litter and biomass, such as bark, is left on the site. Alternatively, farmers should intercrop eucalyptus with legumes or other nitrogen-fixing trees such as casuarina (Campbell, 1987).

Chaturvedi ( 1989) recommends a rotation of eucalytpus of 12 to 14 years for the best technical results. The current annual increment of E. tereticornis peaks in the fifth year and then drops. The wood density increases with age, and reaches a maximum at 13 to 14 years. At this age, the wood acquires its maximum strength and, consequently, its marketable quality improves. Thus, Chaturvedi concludes that it is more economically viable to produce small timber with a rotation of 13 to 14 years than it is to harvest the tree at seven to nine years rotation for pulpwood, which requires lower-gravity wood. Although technically sound, this advice may not be practical: if longer-rotation trees are planned, farmers' preferences may shift from eucalyptus to other high - value species such as teak or Dalbergia sissoo, which also give a valuable pole crop in about 15 years. In fact, it may be better to take a long-term view and plan for a shift to such species, which can enhance farmers' consumption and income in the short term and be complementary to farm production, as Acacia cineraria is to sorghum in western Rajasthan. Therefore, a great deal of research needs to be done to identify other short-rotation, high-value species which suit farmers' requirements for planting on marginal lands and bunds. Species that complement agricultural production rather than reduce it would be welcomed by the farmers, as their primary form of land use continues to be agriculture. Research, extension and seedling supplies should be geared toward diversification and also toward meeting farmers' priorities. In this way, farmers can have a range of trees on their land in order to meet various needs while spreading the risk of the collapse of any one market.

Markets: the most neglected sector

Marketing should be recognized as an important aspect of tree cropping. Currently, the legal and procedural framework makes cutting and selling privately owned trees difficult, irksome and complicated as well as unremunerative (Chambers, Saxena and Tushaar Shah, 1989; SIDA, 1990; Saxena, 1991a). We would suggest, therefore, that these restrictive laws be abolished. Second, the competent organizations should carry out a separate assessment of the future demand, supply and prices for each species, the results of which should be given due publicity. This will help farmers to decide what to plant. For all its imponderables, given the relatively lengthy gestation periods of trees, long - term forecasting should be able to play a useful role.

The role of government and supplies for industry

In states with a glut of eucalyptus, the Indian Government has started buying from farmers. However, this can only be a stopgap measure as there is no hope that it will substitute for private trade. Government organizations should inform tree farmers about the primary and secondary markets, prevalent prices and marketing practices and laws. It could also initiate schemes for linking farmers with industries in ways similar to the linking of poplar farmers with a match factory in northern Uttar Pradesh (Chandra, 1986). In states like Gujarat and Maharashtra, which have a strong tradition of cooperatives, such organizations should be promoted to do marketing and processing.

A significant limiting factor is that pulp mills are not keen to buy from farmers, as they get subsidized wood from the government. Therefore, government should stop subsidies on wood supplies to industries, thereby forcing them to buy from the farmers at fair market prices. Moreover, government as a producer should not compete with farmers, as it seems to be doing now. Rather, its role should be complementary: it should help industry when the cycle of supplies from farms is on the decline and withdraw its supplies when farm supplies are buoyant. We recommend that sales of eucalyptus from government forest lands be withheld completely until 1994, thereby forcing the mills to buy from the farmers.

Government supplies could be resumed in 1994 since the reduced plantings would result in limited farm supplies for the ensuing few years.

Emphasis on marginal lands and poor farmers

The above measures, although important, may not be able to revive the farmers' interest in trees in fertile regions to the same extent as they did in the first phase of the farm forestry programme. The reason is that, in areas where cultivation was assured of irrigation and fertile soils, the opportunity cost of change in land use from annual to perennial crops, especially for the large-scale farmers who dominated the eucalyptus farm forestry experiment, was not offset by the results. However, small-scale farmers can also benefit from farm forestry if it is undertaken on degraded soils at a low opportunity cost. Small and poor farmers' involvement in eucalyptus cultivation on submarginal lands was substantial, as in the districts of Midnapur, Bankura and Purulia in West Bengal, or where a low opportunity cost for land is buttressed by strong pulpwood markets such as Kolar, Bangalore and Tumkur in Kamataka.

In the tribal and subsistence pockets of Panchmahals (Gujarat), where the voluntary Sadguru Water Development Foundation is active, eucalyptus is still being planted. Moreover, it is preferred by farmers on marginal lands, as there is a high demand for lower-grade wood for house construction within the tribal community (Sharma et al., 1991).

Many poor farmers are also wage labourers, and planting trees may help them to optimize returns from both land and labour. In the village of Kovilur, Trichurapalli (Tamil Nadu), many resource-poor farmers have diverted their dry lands from groundnut to cashew and eucalyptus plantations (Saxena, 1989). The groundnut crop fails every two or three years and fluctuations in output prices also affect the farmers. On the other hand, wage employment is available in the neighbouring district of Thanjavur but this requires long absences from the village. Therefore, by planting tree crops, poor farmers are free to concentrate on improving their income through wage labour. The adoption of farm forestry is therefore a means to obtain a safe source of capital and income. Rather than produce for their subsistence needs, farmers channel their energies into more profitable off-farm activities while using their lands for tree crops which require little labour or management and have assured markets.

Outside these isolated pockets there are not many known examples of widespread acceptance of farm forestry by poor farmers, but these instances do establish a possibility for linking farm forestry with antipoverty programmes. On the whole one can conclude that, although the extensive planting of eucalyptus as a farm forestry activity in India has certainly not produced the desired results to date, evidence gathered from field studies strongly suggests that eucalyptus plantations should not be seen as an isolated and distinct phenomenon which can be termed as being either "good" or "harmful". Rather, they represent one land-use option and, under specific but not all circumstances, with sensitive management they may be a viable alternative crop (Kirk et al., 1990).

Growing trees on private wastelands and marginal lands (as opposed to good - quality land which can support more labour intensive annual crops) is both a socially desirable and economically feasible activity. An estimated 24 million ha of uncultivated privately owned, marginal land in India (Chambers, Saxena and Tushaar Shah, 1989), mostly in semiarid regions, could be made productive by the planting of trees. Tree cultivation on degraded lands, in addition to producing the much needed biomass and providing a cover for barren lands, could enhance farmers' incomes substantially.


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