Carbon Market Watch

For fair and effective climate protection.

A Not-So-Clean Development Mechanism

18 Apr 2011

Guest article by Ranjan K. Panda, published in ‘Terra Green’, New Delhi

A not-so-clean development mechanism

Titled “Improving Rural Livelihoods through Carbon Sequestration by Adopting Environment-Friendly Technology-based Agroforestry Practices”, the Clean Development Mechanism (CDM) in Odisha aims at mobilizing resource-poor farmers to raise tree plantations on farmlands. It also seeks to link resource-poor farmers and end users of wood products in order to optimize land use and to facilitate the coordination of wood producers, agronomists, financial institutions, and non-governmental organizations (NGOs) to improve the livelihood opportunities of rural households. Further, the project’s background paper claims that it will be implemented on degraded farmlands or lands used for rainfed subsistence agriculture. The project is presently under the United Nations Framework Convention on Climate Change (UNFCCC) validation and will be funded by the World Bank’s Bio Carbon Fund.

The CDM project has projected an estimated annual reduction of carbon dioxide (CO2) to the tune of 324,269 metric tonnes. It will be implemented in 333 villages in 6 districts of Odisha and Andhra Pradesh, covering some of the poorest districts of India, such as Rayagada, Koraput, and Kalahandi in Odisha and Visakhapatnam, Srikakulam, and Vizianagaram in Andhra Pradesh. These districts are pre-dominated by indigenous population, notified as Scheduled Castes and Scheduled Tribes in India, with the majority of them being poor. So, the project aims at double empowerment—fighting climate change and, that too, in some of the poorest pockets of the country.

The specific objectives of the project include pilot reforestation activities for high-quality greenhouse gas removal by sinks, which can be measured, monitored, and verified; developing plantation and agro-forestry models, which can provide multiple benefits to farmers in terms of timber, firewood, and non-wood forest products; providing additional income to promote livelihoods to resource-poor farmers through carbon revenues; and so on—all of which is going to make it an ideal CDM project.

Contrasting reality

However, the experiences of the people of Kauguda village in the Kalahandi district of Odisha prove that this is just another CDM project that would generate more profit for the company, than the people. Rather, as situation stand today, they are likely to become further deprived. In a place where climate change is already taking its toll, by increasing the number of drought years, for instance, this project may doubly affect the people. This also raises doubts on the effectiveness of afforestation and reforestation projects such as this one under the CDM.

Meet Dinabandhu Gand, a poor and marginal farmer, who owns two acres and twenty decimals of land in the village, which he never left fallow. Although he does not know anything about the CDM project, going by the project documents, he is probably listed as one of the proposed beneficiaries of the CDM project.

Dinabandhu’s farm never failed him, and like many farmers in this belt of Odisha, he has been practising local crop diversity-based ecological farming. “Besides paddy, we also grow cereals, pulses, millets, and vegetables, and this is enough for my family of three for the whole year. We even earn cash by selling black gram, til (sesame), and vegetables”, he informs. “However, ours is a drought-prone area and the fate of our agriculture depends on the rain god”, he adds.  Still, he somehow managed, by practising agriculture based on drought-resistant crops.

Five years back, an official from the JK Paper Mills visited him and asked him to abandon this kind of agriculture and grow eucalyptus instead. “They said that I would earn at least Rs 60,000–70,000 per acre if I raise eucalyptus”, he said. The company officials promised that they will provide very good quality saplings and would continuously visit his fields for at least two years to help him in the technicalities, which are required to be maintained during the initial couple of years, and then, keep in touch with him on a regular basis. “They said that I could harvest three crops in 12 years on a four-year cycle and each time, the company will lift the wood from my field”, he added.

So, he abandoned agriculture and started forestry to provide raw material for the company’s paper mill. The company helped him to obtain a loan of Rs 50,000 from the local branch of a regional rural bank. “Out of it, the bank gave Rs 30,000 to the company directly, and the company gave me 4000 seedlings in lieu of that. I spent the rest, and even a couple of thousand more, in preparing the field and initially, on fertilizer, manure, labour, and other such inputs. The next year, I spent another Rs 5000 for bush cutting, weeding, and so on”, he said, with tearful eyes. By then, he was left with no money and no way of growing anything else on his fields. So, the third year, he did everything himself. “It was painful and impossible to realize that almost all the saplings died. Out of the 4000 saplings that I received from the company, only 60–70 survived”, rues a saddened Dinabandhu, who then had to flee to Mumbai to work as a construction worker.

He returned to his village a year and a half ago, and with help of his friends, he started a tea stall. This year, he has brought back the traditional agriculture to his fields. With the earning from the tea stall, he manages to farm. But, he has kept the remaining eucalyptus trees untouched, so that he can tell people about the “conspiracy” of the company to drive people away from agriculture, only to supply raw materials to their mill. “They are here only for their profit. They lied to me. They never came back to me as promised. These tall trees are testimony to the fraud called eucalyptus plantation, with the aim of earning profits for the company”, says an angry Dinabandhu.

Technically flawed

In the CDM project document, JK Paper Mill has said that it will provide quality planting materials, which they are growing in their nurseries. “The company is indulging in false propaganda. It has built a nexus with the bank, which deducts the loan at source, to be given to the company for the seedlings. No doubt these are seedlings, but ordinary ones, for which they charge too much. Earlier, people used to get free eucalyptus seedlings from the forest department, and that was much better”, says Dipak Mahapatra, ex-Panchayat Samiti member. “We do not know anything about this CDM project, as the company never discusses any plan. Earlier, they were targeting big farmers, which was not a problem, as big farmers have the ability to cope with the shock.  But, for some years now, they are targeting small farmers, who are so marginalized that any false promise of good income lures them to this kind of cultivation, and when they fail, they have no other option but to commit suicide”, he adds, informing how farmers in this area have suffered the same way in the case of cotton and maize cultivation.

B K Rath, General Manager, Forests at the JK Paper Mills, who is dealing with this project, has a different picture to paint. He says, “For this project, we have obtained a strict agreement between the mill and the farmers, whereby no one could cheat…Since the project’s validation process is taking too long, people have lost patience, and in many places, they are cutting their trees. Going by the agreement, we should actually take them to court, but, we would not do so, as they are poor farmers”.

However, after interacting with the villagers, one can clearly see that the claims made by the project document about the land use patterns are completely wrong. “Villagers here are good farmers. They manage to grow their food even in drought years, as they still practise organic agriculture in most of the villages, and the forests—which they protect like sacred groves—provide the required supplementary assistance. The company’s analysis of the land status, where it considers all our land as either barren or put to subsistence farming is completely wrong”, argues Mahapatra. Asked about carbon sequestration through eucalyptus plantation, he narrates, “I am a layman on these things, but I cannot understand if there is a very good natural forest here, which can provide the timber, why a killer tree such as eucalyptus should be promoted, that too, to be harvested?”

“The eucalyptus sucks water from the nearby areas and does more damage to the environment than good”, says Prof. Arttabandhu Mishra, a retired professor from Sambalpur University, who has done extensive research on the environmental impacts of this tree. Dinabandhu confirms it in his own way when he says, “When I started my agriculture afresh after returning from Mumbai, I realized that the water retention capacity of my fields had reduced by almost 50%. Now, whenever I irrigate my land, the water vanishes in no time”.

Also, the company’s claim to ensure a market for the products has also proved wrong.  Almost all the eucalyptus growers of the area complain that the company has not kept its promise in this regard. “Middlemen take the produce from us, and not the company.  So, even when people get a good harvest, the middlemen take away the profit”, says Laxman Majhi, a tribal leader belonging to the Adivasi Sangrami Manch, a forum of tribals in the region. According to him, the monoculture being promoted in the name of good profit is proving disastrous for the farmers.

Contrary to what the company claims, Majhi and others feel that cultivating eucalyptus actually means leaving the land fallow for 12–15 years. “I do not know what they have written in their project, but if they think that our lands are barren, they should come and see, that for the profit of their companies, our farmers have to keep their productive lands barren for more than a decade. You cannot do anything when eucalyptus is cultivated, as it makes the soil acidic and nothing else grows”, complains Majhi.

What is even more important is the income-generation ability of eucalyptus. As Majhi puts it, “In this case, you wait for four years to get some benefit, while in our traditional way of farming, you earn each year, which keeps your family rolling”. According to Dr William Stanley, Executive Secretary, Orissa Development Action Forum, a national-level forum of civil society organizations working on climate change and related issues, “Analysis by our member organizations working in the area confirms that even when farmers are assured of a harvest (though not the price), they have to keep the land fallow, for all practical purposes, for at least 12–15 years, so as to harvest three cycles of plants. So, even if someone was to fetch the maximum price of Rs 60,000 per acre in the minimum term of 12 years, it would work out to be Rs 5000 per year. Deduct the operation and management cost and it comes to about Rs 3000 a year. In the same land, even if someone goes for subsistence agriculture, it would fetch the farmer at least Rs 6000, considering six quintals of paddy (the least that even a barren land in a forested area can produce)”.

In fact, experts from around the globe have already criticized the afforestation and reforestation projects under the CDM on these grounds.  “As such, the CDM has been used as a business mechanism to benefit corporates and financers. The project that this paper mill proposed should have ideally been rejected, as it is technically flawed, owing to the promotion of commercial monoculture, which actually does not do any good to the environment”, argues Dr Stanley. In August 2010, during the XXIII International Union of Forest Research Organization’s World Congress, Prof. M Danesh Mian of the University of Chittagong said, “There are potential benefits of afforestation/reforestation credits, but I caution that alien species may arrive via the plantation process.”  In the same congress, Jürgen Bauhus of the University of Freiburg said, “There are conflicts between silviculture, which aims to enhance select forest functions, and nature conservation, which aims to maintain an ecosystem’s historic conditions”. We have received reports from the Institute for Global Environmental Strategies (IGES), which say that just over 60% of the world’s planted forests are now located in Asia. The rapid expansion of planted forest cover in the region in recent years is largely due to large-scale forestation programmes, especially in China, Vietnam, and India. Planted forests are often troubled by social conflicts, especially when they prohibit rural households from using the land important for their livelihoods. Even when local people are enlisted by the state to participate in government-led planting programmes, strict control of their land-use options tends to undermine their enthusiasm for maintaining the planted forest lots. “Worldwide, it has been proved that natural forests, if preserved, can be the best carbon sinks. The company would anyway do what it is doing in the name of CDM, only to earn extra profit and get international finance. This will lead to further conflicts, as people will virtually be alienated from their land. These are some of the reasons why such projects are being criticized”, says Dr Stanley. “The fact is that this CDM project promotes agro-forestry to provide raw material to a company that itself emits 288,701 metric tonnes/annum of greenhouse gases (that too, as estimated by the company). This figure cannot be believed anyway; coming from a company that has been getting notices from the state pollution control board for not adhering to pollution control norms,” he alleges.

As Prof. Mishra puts it, “In fact, traditional agro-forestry cannot only be a carbon sink, but it can also save agriculture from climate variations, and enhance soil fertility and the water retention ability of the agricultural lands. In the case of eucalyptus, on the contrary, soil fertility goes down and water resources dry up. Globally, most of the CDM projects that come up for review are these kinds of projects, which confirm that these projects are not beneficial and should not be promoted at the cost of the poor”.

Ranjan K Panda