Agroforestry Revolution: Boosting Farmer Incomes and Environmental Resilience

The Economic Advisory Council (EAC) to the Prime Minister recently published a working paper titled ‘Agroforestry: Missing Trees for the Forest’, highlighting agroforestry as a vital sector with numerous benefits. These include meeting the rising demand for timber, creating employment opportunities—particularly for farmers and school drop-out youth—shielding agricul- tural crops from climate-related challenges, and reduc- ing India’s dependence on wood imports.

Agroforestry, a key component of trees outside forests (TOF), cur- rently spans around 8.9% of India’s geographical area and has an estimated annual wood production potential of 85 million cubic meters (FSI, 2021; FSI, 2020).

The report recommends several bold policy changes. First, it suggests that states exempt high-value native timber species like teak, garjan, and meranti from requiring felling and transit permits on private lands. This exemp- tion would allow farmers to cultivate these species more easily, easing the pressure on natural forests.

Second, it calls for expanding the National Transit Pass System (NTPS) to include felling permit issuance, creating a single-window clearance system. The report advises that all states and union territories adopt the NTPS portal, supported by farmer training and awareness programs.

This paper re-examines the 1996 Supreme Court ruling in T.N. Godavarman Thirumulpad vs. Union of India & Ors. (1997), which has frequently been misin- terpreted as imposing a blanket ban on tree felling on private lands. In fact, the ruling specifically restricts har- vesting on forest lands without an approved working/management plan.

Since then, states have introduced various laws/regulations to regulate the felling of trees on private lands, with some states relaxing these rules over time-based on the feedback of their implementation. However, inconsistencies among state regulations continue to obstruct smooth timber movement both within and across state boundaries. This complexity discourages farmers from cultivating timber and in- creases their reliance on middlemen, who charge ex- orbitant commissions that raise costs and reduce profit margins.

However, as these species also exist in natural forests, it will be necessary to work with the states to formulate guidelines to prevent illegal felling and trans- port from the forested areas.

Secondly, this report highlights the importance of promoting domestic cultivation of high-value species, including teak, garjan, and meranti (also known as sagwan, cedar and mahogany), on private lands to reduce timber imports, which reached USD 2.7 billion in 2023 (ITTO, 2023). As one of India’s most abundant and valuable native species, teak represents a significant opportunity for India to reduce its dependence on timber imports and emerge as a leading global exporter.

Additionally, promoting the cultivation of other medium (10-15 years) and long (15-25 years) rotation tree species, such as Melia dubia, kadam, babul, gamhar, silver oak, neem, and mulberry, is equally vital to minimizing timber imports (Sapra, 2023). However, the cultivation of these species remains limited due to higher opportunity costs, making their expansion on private lands challenging for farmers.

To overcome this, bold and innovative measures are needed to promote large-scale cultivation of these species and incentivize private landowners.

Policy initiatives such as liberalizing licensing for the wood-based industry, revising export and import policies to encourage domestic timber production, and treating the wood industry on par with food processing are crucial for achieving self- reliance (Atma nirbharta) in wood and wood products (Sapra, 2024).

Key steps include incorporating labour-intensive sectors like furniture and plywood into the Production Linked Incentive scheme, establishing a National Wood Mission, reducing GST on wood and wood products, and offering incentives to plantation companies and wood-based industries, such as discounted loans, capital subsidies, and tax concessions to support the production of large-sized timber.

Establishing a minimum support price (MSP) regime for timber produced in the non-forest areas, similar to MSPs for agricultural produce, and extending incentives and facilities available to agricultural crops to tree crops are also vital reforms.

Although numerous recommendations have been made over the years to advance the agroforestry sector, the pace of reform has been slow, hindering its full potential.

Now is the time for bold initiatives and reforms at both central and state levels to drive growth in this sector. Such policy changes in agroforestry would create significant rural employment opportunities, increase farmer incomes, meet the raw material demands of wood-based industry, and ultimately support rural development, alleviating rural distress.

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