In this article we will discuss about:- 1. Introduction to Forest-Based Industries 2. Models of Forest Based Industries 3. Contract Farming Methods 4. Industrial Policy 5. Challenges 6. Measures.
Introduction to Forest-Based Industries:
With only two per cent of the world’s total forest area and 15 per cent of its human and cattle population, India encounters a critical disequilibrium in its natural resource pool. Half of the country’s legal forest is deplorably degraded and deforestation occurs at alarming rate of 1.5 million ha per year till the recent past. These have ushered in not only a total mismatch between supply and demand of both domestic and industrial wood requirements but also leads to degradation of the land surface.
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The forests have very low growing stock at 74 m3 per ha compared to the world average of 110 m3 per ha. Similarly, the mean annual increment is very low at less than 1 m3 per ha per year compared to the world average of 2.1 m3 per ha per year. The shortfall in forest area coupled with poor productivity resulted in dwindling supply of raw material requirements of various wood based industries.
Most of the wood based industries like pulp, paper, match and veneers are largely dependent on forest department supply but due to government policies and the promulgation of Forest Conservation Act, 1980 restricted the supply of raw material to the wood based industries which necessitated massive import of sawn timber, pulp and even newsprints.
Substantial improvement in productivity of forest resources on sustainable basis and large scale expansion of industrial linked agroforestry plantations are critically important for meeting the industrial raw material requirements besides achieving the national goal of 33 per cent forest cover. Diversification of agriculture should receive high priority as water resources are depleting.
However, tangible results can be achieved only if the farmers are offered practical, viable and economically attractive alternative land use options. Technology based farm forestry plantation with genetically improved, high yielding and fast growing clonal planting stock has tremendous potential for diversification and meeting growing shortages of industrial wood on sustainable basis. However, meticulous planning and integrated development of farm forestry and wood based industries are required to ensure regular demand and remunerative prices to the growers.
Models of Forest Based Industries:
This model incorporates industry, growers and research institute. Under this system, the industry supplies quality planting material at subsidized rate and assures minimum support price or the prevailing market price whichever is higher. The farmer supplies the material to the contracting industry and the research institutes will advice on the site specific technology.
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This system is similar to tri-partite model barring the involvement of financial institution. The financial institutions viz., Indian Bank, State Bank of India and Syndicate Bank provide credit facilities to the growers at the rate of INR 15,000 to 20,000 per acre in three installments. For credit facilities, a simple interest rate at 8.5 per cent is followed and the repayment starts after felling.
The contract farming system extends no collateral security for loan amount up to INR 1,00,000 per farmer. The research institute particularly Forest College and Research Institute (TNAU) play a significant role for technological advancements through varietal development and also to advice site specific precision silvicultural technology to the growers. A pre and post-plantation scientific advice helps to develop human resources through on and off institute mode to farmers and plantation staff of the industries.
The industry mass multiply the potential genetic materials identified by the research institute in a decentralized manner and supply them at subsidized costs. The industry also facilitates felling and transport at their own costs, which resulted in strong linkage between industry and the farmers.
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The industry also help to repay the loan amount after felling of farm grown raw materials there by help the financial institutions for timely repayment, which resulted in strong institutional mechanism for sustainability of the contract tree farming system in the state.
Contract Farming Methods of Forest Based Industries:
The following contract farming methods designed by Forest College and Research Institute of Tamil Nadu Agricultural University are successfully adopted and implemented by paper, match and biomass based power generation industries.
i. Farm Forestry Method:
In this method, the industry supply the quality planting materials of site specific variety identified by the research institute to the interested farmers on a subsidized rate. The farmers in turn, develop his own plantation and obtain the needed technological support from the research institute.
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If needed, the farmers get credit facility from the financial institutions and final felling and transportation by the concerned industry. An agreement is made before the plantation establishment. In this method, the farmers grow only trees without any intercrop and mostly practiced in dry land condition.
ii. Agroforestry Method:
The farmers raise industrial wood plantation as a major crop and grow suitable intercrops and this method is practiced mostly in garden land conditions. The other conditions are similar to that of Farm Forestry Method.
iii. Captive Plantation Method:
In this method, the industry could develop their own plantation through land lease or benefit share model. The large land holders and the lands available with government and private sector which were unutilized for a longer period can be utilized. A minimum land size requirement of 25 acres for 1 cluster unit is needed. Once the land is identified the land holder can opt either land lease model or benefit share model.
iv. Land Lease Model:
In this method, the land owner and the industry will have an agreement for lease amount and the lease period. The lease agreement of INR 1000 per annum for dry lands and INR 3000 per annum for garden lands is practiced. Once the lease agreement is signed, the industry will establish their captive plantation and the period of lease is for one rotation and tenable further based on mutual consultations.
v. Benefit Share Model:
Under this method, the land owner agrees to share the benefits at the time of harvest. Accordingly, an agreement is made wherein the industry will establish the plantation at its own cost and the benefit will be shared at 70 (industry):30 (land owner) for dry lands and 60 (industry):40 (land owner) for garden lands. The benefit share is worked at the total yield of the produce.
Industrial Policy and Forest Based Industry:
While establishing forest based industries, it is essential to consider precautions in order to avoid environmental disturbances. Establishment and development of forest based industries form an important part of National Forest Policy of 1988.
The policy indicated the following guidelines towards establishment and sustainable functioning of forest based industries:
i. As far as possible a forest based industry should raise the raw materials needed for meeting its own requirement, preferably by establishment of a direct relationship between the factory and the individuals who can grow the raw material by supporting the individuals with inputs including credit, technological advice and finally harvest and transportation.
ii. No forest-based enterprise, except that the village or cottage level, should be permitted in the future unless it has been first cleared after careful scrutiny with regard to assured availability of raw material. In any case, the fuel, fodder and timber requirements of the local population should not be sacrificed for this purpose.
iii. Forest-based industries must not only provide employment to local people on priority but also involve them fully in raising trees and raw material.
iv. Natural forests serve as a gene pool resource and help to maintain ecological balance. Such forests will not therefore be made available to industries for undertaking plantation and for any other activities.
v. Farmers, particularly small and marginal farmers, would be encouraged to grow, on marginal, degraded lands available with them, wood species required for industries. These may also be grown along with fuel and fodder species on community lands not required for pasture purposes and by Forest Department/Corporations on degraded forests, not earmarked for natural regeneration.
vi. The practice of supply of forest produce to industry at concessional price should cease. Industry should be encouraged to use alternative raw materials. Import of wood and wood products should be liberalized.
vii. The above considerations will, however, be subject to the current policy relating to land ceiling and laws.
Challenges of Forest Based Industries:
1. Non Availability of Adequate and Quality Raw Material:
The biggest challenge faced by the wood based industries is the spectare of raw material unavailability. The available raw materials are not only certain but also with varying degree of quality. Hence, promotion of farmer’s linked clone based agroforestry activities in marginal agricultural lands will help to augment the quality raw material availability in a shorter period of time.
2. Lack of Quality Planting Material and Productive Plantations:
Traditionally plantations are raised by the farmers through unimproved and unknown seed sources which recorded the yield less than 10 m3 per ha per year. Such poor yields with small and scattered plantations coupled with all logistics problem and escalated cost in felling and transportation are the stumbling blocks for the wood based industry particularly the pulp and paper industries to be economically viable and internationally competitive.
Intensively managed plantations based on genetically improved planting stocks can achieve the productivity levels of 15-30 cubic meter per ha per year even on marginal lands. Hence, it is very essential to intervene strongly by introducing improved genetic resources and their popularization across the farm lands of the state. This process acted as a basis for productivity improvements coupled with profitability, income and employment generation through various decentralized forest based nursery and plantation activities.
3. Poor Understanding on Value Addition Process:
The productivity and profitability of the plantations are directly linked to the time and type of harvesting system coupled with suitable post-harvest management system in order to reduce the logging impact and to augment the productivity. Traditionally, plantation operations in the country are done manually and the plantation residues are not properly utilized. Rather the plantation residues are left in the field without any utilization.
The intervention through introduction of mechanization in harvesting operation and established value addition process of plantation residues through briquetting technology proved successful in various plantations species particularly in Casuarina and Eucalyptus.
The plantation and industrial wood processing activities accounts for 20-30 per cent of residues which are either unutilized or underutilized for want of suitable recycling technology and the associated supply chain system. The conversion of these resides into briquetting technology significantly increased the income of the growers and value addition industry.
4. Unorganized Supply Chain and Trade:
The success of Industrial wood plantation schemes and the related plantation established is widely questioned. The reasons for the failures are numerous; but the key reasons are non-involvement of local people, lack of assured buy back and minimal support price. Above all, the supply chain was multipartite. To augment the supply chain system and to transform them as value chain system, the research group has designed a Quad- Partite Model Contract farming system through efficiently linking the growers, industries, research institutes and financial institutions.
Currently the price information pattern of industrial wood species is not known to growers due to lack of price information system and its dissemination. This current research group resolved this issue by establishing a separate website to periodically disseminate the pricing pattern of industrial wood species through regular updating system.
Measures for Better Development of Forest Based Industries:
The wood based industries have faced serious challenges in terms of raw material availability, unorganized supply chain and lack of synergy among various stake holders. The legal and policy changes also created major threat to the successful running of wood based industries. Under such circumstances, the following measures will help to augment the production potential of all wood based industries besides creating sustainability in their production process.
Technology Development and Adoption:
i. Development of High Yielding Varieties and Clonal Technology:
The success of wood based industrial operation depends directly on the availability of quality raw material in a short period of time. Hence continuous research and development support is essential to develop High Yielding Varieties (HYV) amenable for short rotation with multifarious utility.
ii. Precision Silviculture Technology:
The knowledge on proper implementation of scientific and precision package of practices is most essential for exploiting the advantage of genetic superiority of developed variety. The technology development on optimization of nutritional and water requirement during different growth periods need to be developed for establishment of successful industrial wood plantations. Integrated development of pest and disease management for large scale industrial wood plantation needs to be developed for increased productivity.
iii. Cogeneration of Wood and Food:
Cogeneration of industrial wood with other annuals will help to attract the small and medium farmers towards industrial wood plantation establishment. Hence development of integrated tree and crop models using high yielding short rotation clones coupled with commercial crop will help to obtain recurring income from the small and medium farm holdings thereby help to attract more farmers, towards tree husbandry.
iv. Value Addition Technology:
Many of the plantation activities resulted in large quantities of plantation residues which are either unutilized or underutilized for want of suitable value addition process. Hence, development of decentralized value addition technology particularly briquetting technology, charcoal production technology, particle and fiber wood technology using the plantation residues will help to attract many stake holders towards tree husbandry besides creating adequate decentralized forest based new rural industries.
v. Designing and Promotion of Contract Farming:
To establish industrial wood plantation, for various wood based industries the author has designed various contract farming methods and implanted successfully in pulp and paper industries, match industries and also in forest biomass based power generation industries. Hence these models can also be adapted and implemented for other forest based (wood and non-wood) industries to improve and develop industrial wood plantations to create self-reliance in raw material availability.