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This File was last Updated/Modified: February 04 2010 15:47:03.

Leasing of degraded Forest lands

Executive Summary

The Planning Commission set up a Working Group to examine the prospects of leasing out of degraded forests to the private entrepreneurs/ Forest Corporations. The terms of reference for the Group were:-

Economic, social and environmental feasibility of leasing or otherwise making degraded forest land to the private entrepreneurs/ Forest Corporations.

Implication of Ninth Plan, forest policy, forest law on this issue.

Since it is paper and pulp industry which has been demanding forest lands on lease either directly or via the Forest Development Corporations (FDCs), we essentially considered the merits of making degraded forests available to the paper industry for meeting their raw material needs. The concept prima facie is quite appealing; government has wastelands but lacks funds, industry has both capital and technology, and hence best suited to afforest degraded lands. In the process the poor get jobs. So why should one object?

Non-forest barren lands - The Group supported the involvement of industry in reclamation of non-forest wastelands, such as desert lands of Rajasthan, Bhal lands of Gujarat, ravines of M.P. and saline lands of U.P. The total area of such lands is estimated as 20 million hectares. In fact several state governments had in the past offered on lease such non-forest degraded lands, but industry showed no interest. The state laws relating to land ceiling in Rajasthan and Gujarat are liberal enough to grant exemption on such leases from Ceiling limits. Despite the initial high cost of reclamation these lands have the advantage of being available in contiguous patches and hence amenable to economies of scale. Besides, these degraded lands do not support the livelihood needs of the poor, and therefore handing them over to industry does not exacerbate social tensions.

Degraded forests - The situation would be entirely different if village commons or degraded forests are leased to industry. Industry has argued that it would make 'unproductive' lands productive through captive plantations. However, if productivity is defined in terms of subsistence value, such forests are a vital source of living for the poor. Such lands may have a low tree density, but satisfy the fuelwood, fodder and livelihood needs of about 100 million poeple. In fact, these lands are degraded because they suffer from extreme biotic pressure, and require neither capital investment, nor higher technology, but protection and recuperation, which can be done only by working with the people, where industry has neither expertise nor patience. The West Bengal experience shows that about 2000 peoples' forest protection committees have regenerated more than 300,000 hectares of sal forests at little extra investment, simply by protection on the promise of sharing wood and non-wood products with them. If lands on which peoples' livelihoods are dependent are given to industry, they may have to employ muscle power to keep people at bay, thus escalating social tensions, which are already quite acute in several forest and park areas.

Even within the industrial sector, paper and other large industries consume just a fraction of forest products. 90 percent of forest raw material is processed by 25,000 saw mills and a larger number of cottage units, who would also lay claims on forests, once their big brother is able to snatch concessions from government. Besides there would be claims from coffee, cashew and palm plantation industries. Like paper industry they will raise short-term and quick growing species in place of multi-layer mixed forests obtained through regeneration. Its ecological implications need to be taken into consideration. Using forests for growing raw material for industry will be setting the clock back to the 1960s, showing that we learnt nothing from the mistakes of the past 30 years of trying to create man-made forests, which were ecological disasters, besides completely alienating the people and leading to faster degradation.

According to industry's own admission, their requirement can easily be met from 2 million ha of degraded land. As against this there is 141 m ha of cultivated land and 20 m ha of farmer owned uncultivated wasteland. These lands have the potential of producing pulpwood, especially in view of the fact that both eucalyptus and bamboo are short rotation crops and eminently suitable for farm sector. In fact the bogey of raw material crunch is no longer valid, given the vast expansion in farm forestry programme. There is a surplus of eucalyptus wood today, as is evident by the sharp fall in eucalyptus prices all over the country, well documented in the World Bank reports on forestry in India. The problem is locational; industries got established close to government forests, where as raw material is available in green revolution areas. A practical solution would be to split the processing units; to establish a new pulp making plant close to farm forestry areas, and transport pulp to the paper mill. If pulp can be imported from as far as Canada, surely it can be moved from Punjab or Haryana, where a pulp producing mill can be located, to Central and eastern India, where paper mills are located.

If industry produces its own raw material, who would farmers sell to? Where is their market, if not industry? 60 percent of farm land is owned by rich and affluent farmers, who are market oriented, and can be trusted to fulfil the requirements of industry. They are even prepared to produce teak wood, if government removes restrictions on the felling of teak trees from private lands and on its movement. Since the overall demand of the industry is limited, and if allowed to be met by leasing it would adversely affect the farm forestry programme, which is one of the cheapest and most sustainable method of producing wood.

The prosperity of the Indian farmers is the very basis for the prosperity of the country. The farmers are at a very great disadvantage as their crops are susceptible to great fluctuations in market prices, perishability of commodities and consequent urgency to dispose of the produce, adverse climatic conditions as well as pests and diseases. The only crop that is not susceptible to these adversities is tree farming, which can be taken up either in place of crops or along with them. Leasing of degraded forests to industries would deprive the farmers of even that opportunity of taking up tree farming.

Thus the claim of the industry that it would create additionality of production is not true, as any afforestation by them will be at the cost of tree planting efforts by farmers on privately owned degraded lands, tubewell enclosures, and homesteads, where the social cost of production is minimal, as these lands are of no use for cultivation. Thus the argument that farm forestry would compromise food security is irrelevant, in the face of empirical historical evidence of significant tree plantation by farmers on lands which were not suitable for agriculture. Farmers exploit their own family labour (which is unpaid), and therefore can produce wood cheaper than industry. Farmers harvest their trees during the lean agricultural season and thus are able to achieve further saving in costs by spreading family labour inputs more evenly throughout the year. In fact the government policy of subsidising bamboo production on forest lands for supplies to industry acts as a deterrent to cheaper production on homesteads. The present proposal of the industry means getting land almost free of capital cost, thus involving subsidy worth several thousand crores. In the light of new liberalisation policies of the government, such subsidies on non-merit goods are highly undesirable.

The proposal of the industry to allow them to use government forests for industrial plantations is thus against two groups of people; lakhs of farmers who would be deprived of a market for agroforestry, and millions of voiceless forest dwellers who would be denied access to NTFPs and other biomass that they gather.

The introduction of Panchayat Act in tribal areas, where most forests are located, will render leases to industries of forest lands illegal and unconstitutional, as the spirit of the Act is in favour of local ownership and control over natural resources in Schedule V areas. In any case, involving industry in afforestation of government forests is against the Forest Conservation Act and the Forest Policy, both on grounds of management and species choice. Even Forest Department is prohibited from doing plantations of cashew or rubber on forest lands, how can then private industry be allowed to raise monocultural plantations?

During the course of the enquiry by the Group, representatives from the industry clarified that they require forest lands with at least 1 metre soil depth. Such fertile lands, even when not having much tree cover, would regenerate on their own without much cost. Thus regeneration woud be a cheaper economic option than plantations. Besides, the industry has no credible plan to resolve the demands that local communities have over such lands. As such, any leasing of forest land is likely to result in hardships and oppression for the local communities who have historically depended on such lands for meeting their basic needs.

It is now being proposed by some that the management of degraded lands should remain with government corporations but private companies may invest their money in the plantations. If government banks have not found the activities of these corporations worthy of investment, why would private companies do so? Forestry being a long gestation activity, it requires stable tenure. If land, management, and source of funds is going to be with three different parties; government, FDCs, and private industry respectively, the risk for the investor is very high, unless there is unwritten and unstated understanding between the parties.

Lastly, degraded forest lands with crown density of 25 and 40 per cent are not likely to be available in contiguous patches, as these are likely to be interspersed with better quality forests.

Therefore industry should be asked to establish links with farmers who will produce raw material if given a remunerative price, in ways similar to the linking of poplar growing farmers with a match factory in north U.P. This experiment shows that, with technological back-up, timber size trees suitable for sawing can be raised on farm lands within eight years. In fact, due to farmers' enthusiasm for growing poplar its enhanced supplies have led to the establishment of several plywood factories in that area, thus providing considerable downstream employment. It is a myth that industry cannot deal with farmers directly. For several crops like sugarcane, potato, rice, cotton etc. industry has been in touch with farmers for decades.

The Ministry of Environment and Forests has argued that the industry are interested not in degraded forests on which the poor depend but only in barren forests (approx. area 6 m ha, density less than 10%). If that is so, why don’t they show interest in revenue wastelands which are available in many states? In any case the Group was unequivocally informed by the industry that they are interested only in lands with sufficient soil depth of at least one metre. Paper industry has to be internationally competitive which would need raising plantation on good quality lands available in one patch. According to the Group, such lands would necessarily be good quality forest lands away from habitations, or farm lands and homesteads. If industry is not to get good quality forests, they have no other alternative but to establish links with farmers.

In the ultimate analysis the question to be asked is, whether the claim of the industry over forest lands is based on transparency and sound economic rationale, or is it a seductive myth and against the interest of farmers and forest dwellers?