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Appealing proposal for agro-forestry activities to produce both food and cash crop (pulpwood) on degraded land. A good proposal but the judges were concerned about its sustainability.

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Project has been piloted and seems to be working. Please elaborate on:

Economic benefits to participate in the scheme (versus "business as usual").

Also, please elaborate on how the project's impact might be scaled up.

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Jitendra Sinha

Jun 14, 2016
11:47

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Thanks for selecting the SAI's work for moving to the next round of selection process. Yes, the project was piloted in 2013, and it is in the stage of scaling-up under PPP (Public-Private Partnership) model with Forest Department, State Government of Chhattisgarh, India

Economic Benefits versus Business as Usual

As SAI is working exclusively on barren land there is currently no economic benefits from these lands to the tribal farmers. Through SAI intervention, farmers get economic benefits in three different ways:

  1. From Matured Pulpwood: SAI has already signed advance purchase agreement with paper industries, according to which current market price will be the base price. As the plantation takes 4 years to mature with an average productivity of 40 tons/acre, the farmers will sell at future market price (after 4 years) or today’s market price, whichever is higher. The market price in 2012 was Rs.2700/- per ton (US$41 per ton) which is now Rs.4500/- per ton (US$70 per ton).

At today’s market price, the farmers will get a gross income US$2800 per acre (US$70 x 40 = US$2800). After deducting the harvesting and transportation cost (@US$20 per ton) s/he gets a net income US$2000 per acre in one cycle of plantation (4 years) or US$500 per acre per year.

  1. From Inter-crop: The farmers also cultivate inter-crop for which s/he gets approx 3 quintals per acre per year under rainfed condition. At current market price of US$90 per quintal, the farmers earn US$270 per acre per year.  (US$1 = INR65)

 

  1. By Saving Money on Fertilizer: SAI encourages farmers to grow legume crops (Pigeon Pea, groundnut, chick pea) with nitrogen fixation ability as inter-crop for which it has tied up with agricultural university in Chhattisgarh. As per ICRISAT field research, these crops fix 30 kgs of nitrogen per acre. By converting this amount of nitrogen into economic value, the farmers save US$20 per year on urea fertilizer (46% N with subsidized rate of US14 per bag of 50 kgs).

 

As such, the total economic benefit to the farmers through agro-forestry intervention is US$790 per year, which is above international poverty line of US$1.90 a day (http://www.worldbank.org/en/publication/global-monitoring-report).

The farmer is likely get economic benefits from 4th source through carbon credit once SAI is able to establish its mechanism. As per UNFCCC assessment conducted in SAI field area in Odisha, 50% of the wood mass i.e. 20 tons per acre is atmospheric carbon. As such the farmers can get economic benefit through carbon trading.

Scaling up Project Impact

SAI has already established its model in 300 acres in Odisha. Impressed by our success, the Forest Department, Chhattisgarh government has recently collaborated with us under Public-Private Partnership (PPP) mode to scale-up the model in tribal dominated regions (Bastar, Sarguja, Raigarh, etc.) of Chhattisgarh by utilizing Compensatory Afforestation Fund under CAMPA (http://www.dnaindia.com/india/report-lok-sabha-passes-bill-on-compensatory-afforestation-2208878). It is worthwhile to mention that recently Indian Parliament passed US$6 billion under CAMPA

SAI is enhancing the impact in two ways

  1. Scaling up the Area: As per the collaborative arrangement with the Forest Department, Chhattisgarh, SAI will facilitate identification and capacity building of farmers, and the government will provide inputs (sapling, fertilizers and medicines) and incentives to those farmers (Rs.6 per plant). SAI will further provide technical handholding and supply chain management support to farmers for which it will charge 10% of the farmers’ net income. The Forest Department was implementing CAMPA under ‘Hariyali Prasar Yojna’ in Chhattisgarh while SAI was promoting agro-forestry with the same plantation species in neighbouring state, With two partners joining hand, the impact is likely to be multiplied manifold.

With the formalization of this collaboration, SAI has potential to cover 25,000 acres every year in Chhattisgarh. It is anticipated that once the collaboration is proved successful, other state governments will come forward to collaborate with SAI to replicate the model in their states.

  1. Deepening the Impact: SAI is also working with farmers on value chain management of the inter-crop, by promoting small scale processing and packaging activities. This will further enhance the income to the farmers and provide employment to those rural youth, who will be managing the processing and packaging work. We are promoting collaboration with Indira Gandhi Agriculture University, Chhattisgarh to link with ‘National Food Security Mission’.