Forest productivity - Lumber slumber

Forest Development Corporations are yet to keep pace with the rising demand for timber, though cultivable lands exist

By Soujanya Shrivastava
Published: Friday 10 March 2017

The gap between consumption and production of timber and wood based products in India is rapidly increasing. However, it is difficult to estimate the quantum of this gap due to the lack of reliable data on the consumption of timber and wood products since it is a highly unregulated market. Despite having 21.34 per cent of the country’s total geographic area under natural forests, it has a limited role in meeting this growing demand. It contributes just 6.4 per cent—about 3.17 million cubic metres (cum) of the demand, according to the State of Forest Report 2011 (this is the latest estimate available) published by the Forest Survey of India. Trees outside Forests (TOF), including the agro-forestry, is meeting timber demand much more than natural forests. Currently, 44.34 million cum of timber is harvested from this source annually. The growing stock (GS) of trees under agro-forestry is approximately 70 per cent of the total GS of the TOF.

Unorganised, so unregulated

Timber and pulpwood are mainly used by the construction, furniture, wood panels and paper sectors. While the demand for furniture has been rising between 12 and 15 per cent annually, the demand for paper has been rising steadily at about 8 per cent annually. In fact, India is considered the fastest growing paper market in the world. According to experts, the annual demand for wood-based panel products such as plywood, particle board and fibre board is 8 million cubic metres against the production of 3.4 million cubic metres. It is, however, difficult to calculate the consumption figures within the Indian wood based products industry as its market is highly unorganised and unregulated.

The Forest Survey of India, in its State of Forest Report 2011, has estimated that the annual consumption of wood in three sectors—house construction, furniture and agricultural implements—is 33.61 million cum, the Round Wood Equivalent (RWE) of which is 48 million cum. After this, two biennial reports have been published, but these don’t mention anything about the consumption of wood. According to a study by the South Carolina Forestry Commission, the consumption of wood in India in 2014 was estimated to be 50.1 million cum of industrial roundwood, 23.2 million tonnes of paper, paperboard and other fibre and 11.16 million cum of sawn wood and panel wood.

FDCs: how they are failing

Forest Development Corporations (FDCS), the production and commercial wings of forest departments, were established in the 1970s based on the recommendation of the National Commission of Agriculture in 1970. The primary objective of FDCS was to launch an aggressive forestry production programme which could meet the growing demand of wood based industries. While FDCS lease large tracts of forestlands to convert natural forests into plantations in some states, in others, FDCS harvest and market timber from earmarked forestlands.

Still, FDCS produce less than 5 per cent of total timber production of India (1.97 million cum of timber annually). As a result, the country is meeting its shortage for wood increasingly through imports. In 2015 alone, imports of timber and allied products contributed a very significant part of the demand—an estimated 18.01 million cum. Thus, there is a significant gap between demand and supply of wood in India, and imports are only bound to increase in the coming years.

As of March 2016, there are 19 FDCS engaged in timber-related operations across the country. Of these, 11 FDCS have nearly 1.28 million hectares (ha) of forests in their possession, which have been utilised for raising industrial as well as cash crop plantations. An area of 1 million ha has been approximately brought under plantations by FDCS, which comprises mainly teak and eucalyptus plantations.

As per a Centre for Science and Environment (CSE) analysis, the average annual production of wood by FDCS is 1.97 million cum. Despite FDCS’ original objective of raising productivity of forests, the per hectare production from their lands is as low as 0.77 cum per ha per year, while TOFs are producing nearly 3.06 cum per ha per year. Therefore, FDCS have fallen far short of their objectives, and are nowhere close to becoming a major player in the wood market of the country.

Poplar : Not Popular Anymore
Since the government has not regulated a Minimum Support Price for poplar wood, merchants have reduced prices in Yamuna Nagar, India's timber hub, affecting the income of farmers

There are several reasons attributed to decline of poplar prices in Yamuna Nagar, India's major timber hub. The local timber traders and merchants say that for poplar, the government has not set up any Minimum Support Price (MSP), unlike wheat and sugarcane. Due to lack of alternatives to sell poplar produce, the plywood manufacturers arbitrarily decide the rates to maximise their profits, since they are the major buyers of timber, and thus dominate the timber trade in the region.

The president of the Manakpur Timber Association in Yamuna Nagar says there are other reasons behind the fall of poplar prices—non-issuance of new licenses since 2002 to establish new units for peeling and saw-milling. This has constrained the scope of timber trade in the region, with plywood industries having the upper hand in decision-making regarding the prices.

Moreover, plywood factories have started using the Chinese-made peeling machines, which can peel much thinner logs, unlike the traditional ones. This way the rotation period of pulpwood tree species have been shortened—poplar trees' rotation period has decreased from 7-8 years to 3-4 years, resulting in oversupply, thereby affecting the prices.

There are no government sawmills or factories in the region and this has discouraged competition and farmers have been left with the existing buyers.


Resurgent farm forestry

The agro-forestry and farm-forestry sectors remain the mainstay for wood production in India. The State of Forest Report 2013 estimates that nearly 11.15 million ha is under agro-forestry. Data from the Indian Council for Agricultural Research and the Central Agroforestry Research Institute, Jhansi, suggests that agro-forestry and farm forestry meet almost half of the demand for fuelwood, two-thirds of small timber, 70-80 per cent for plywood, 60 per cent of raw material for paper pulp and between 9 and 11 per cent of the green fodder requirement of livestock, besides meeting the subsistence needs of households for fruits, fibre, medicine and fuelwood. Agro-forestry practices have demonstrated that this could be safely enhanced to more than 30 cum per ha per year by carefully selecting tree-crop combinations.

But there are unique problems. Take, for instance, Yamuna Nagar in Haryana, which is a well known region among farmers, timber traders, merchants, industries as well as scientists and researchers. The district accounts for 80 per cent of the soft timber production in the country, and produces around 50 per cent of the plywood in the country through over 5,000 small, medium and large wood based units set up in the region. However, the prices of poplar trees declined by at least 60 per cent in the last three years in the Yamuna Nagar Timber Market. The situation is so bad that farmers, who were earlier earning Rs 15,000 per tonne in 2012 from the sale of poplar trees, are unable to earn even Rs 5,000 per tonne in 2016 (see ‘Poplar: not popular anymore’).

Sustainable pathways

It is time the problems associated with the wood production in the country are recognised and swift steps taken to keep up with the rising wood demands. The agro-forestry sector must be given a boost. For this, some concrete planning over the optimum and sustainable utilisation of land resources is required. More wood markets need to be established in close proximity to the agro-forestry regions. The forestry policies need to be farmer-friendly to enable them to produce hassle-free wood by doing away with the archaic taxation systems and wood transit rules, as well as by introducing an effective Minimum Support Price regime. More government owned wood-processing mills need to be established to end the monopoly of private players in the wood markets.

Moreover, the government must realise that abundant lands exist to produce wood. The land use figures suggest there is an availability of 12.6 million ha of cultivable wasteland and 24.58 million ha of fallow land which can be utilised to enhance productive in agroforestry or farm-forestry sectors. Other than agro-forestry systems in India, a serious review of the fdc model is required. The productivity of forestland under the control of FDCS must improve to make them key players in the wood market of the country.

With inputs from Shruti Agarwal and Ajay Kumar Saxena

Build a value chain

THE POSITIVE thing to do would be to create a system of localised payments for the ecosystem services of forests, necessarily involving local communities. There are four basic services for which there is a clear demand: one could reward people for conserving biodiversity, providing carbon sinks, protecting watersheds, and maintaining scenic beauty or recreational values. But the only way this can happen is if these services have real values attached to them.

Paying for ecological services is not a new phenomenon. Many countries are already on this road to conservation. And they are on this road because, wherever forest evaluation has been applied, the "command and control" approach of governments have failed. Add to this the problem of limited state budgets and decreasing funding from external agencies, and localised payments could prove a longer-term solution to financing conservation in India.

Putting a true value to forests could transform the way forest conservation is done. Methods exist. But does the political will exist that trusts local communities?

Down To Earth, 15-31 July, 2005

The article has been taken from the State of India's Environment 2017

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