Carbon Market Watch

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Improving Rural Livelihoods Through Carbon Sequestration? (Watch this! #3)

31 Oct 2012

See Watch This! #3, October 2012

By Debjeet Sarangi, Living Farms

Land grabbing in India takes many forms including expansion of plantation monoculture for carbon sequestration. Often, private companies are contracting farmers to grow eucalyptus trees, purportedly as raw materials for paper, promising higher income. Hoping it could be a ticket out of poverty, many farmers joined the ride with disastrous consequences. This article looks at the impacts that Afforestation and Reforestation (A/R) projects can have on local farmers.

The story of farmer Apparao Hikoka

In 2000 representatives from JK Paper Ltd, (JKPL) and Utkal Gramya Bank approached Apparao Hikoka, a 54 year old tribal farmer in the Sanabrundabadi village of the district of Rayagada in Odisha, with the proposal to plant eucalyptus. They promised he would earn more from this than from his previous agricultural practices. After he agreed he was given a loan of INR 48,000 (768 EUR) with 12% cumulative interest,for his two-acre land, but only half of the money was actually given to him. The other half was deducted against the cost of 8,000 saplings of eucalyptus from JKPL’s nursery. Apparao used the half he received to buy chemical pesticides and to pay for additional labour to plant the seedlings. He then waited for the first harvest. He got a good return in 2007 earning INR 65,000 (1040 EUR). What the company did next was appalling to Apparao: they took his total earnings,adjusting it against his loan and interest. H. He felt very angry and helpless, but little did he know that it would be the same situation over and over again in the succeeding harvests. It has been 11 years now and the eucalyptus trees are still growing on his farm, but for Apparao Hikoka, they’ve been a constant source of heartbreak. His cycle of indebtedness has left him penniless.

The story of farmer Nari Praska

In the Majhialama village, every year farmer Nari Praska used to get 800 kilos of finger millet, 400 kilos of sorghum and 100 kilos of pigeon pea from his 4-acre (1.6 hectare) land. His six-member family received sufficient nutritious food from his land and he even earned INR 2000 (EUR 31) from selling his surplus grain. Malnutrition or food crises were never a problem and he owed it to the mixed cropping system that he followed. However once he started planting eucalyptus, everything has changed.  Now his family faces 4 months of food shortage every year. Back in Sanabrundabadi, even his fellow farmer Apparao Hikoka said he was planting 6 varieties of millets and 2 varieties of pulses and oil seeds on his 4-acre land before planting eucalyptus. Today, just like Hikoka, Praska has to buy food for his family from the market as his harvest from eucalyptus is only sufficient to feed his family for 4-5 months per year.

More farmers going bankrupt

Four other farmers in Sanabrundabadi have also claimed to have experienced the same thing.  For them, it was a bigger mistake: the amount they get from eucalyptus plantation is not even enough to repay the loan. The experience of farmers in Sanabrundabadi is also shared by farmers in at least 7 other villages in the Rayagada district. JKPL’s eucalyptus plantation project covers around 3,000 hectares of land in three districts of Orissa and Andhra Pradesh (Rayagada, Kalahandi and KoraputSrikakulam, Vizianagaram and Visakhapatnam).

Eucalyptus: the wrong choice

Though a potential industrial crop, many literary references point to eucalyptus as an inappropriate inter-crop species in agroforestry systems. This is because it releases inhibitory compounds that adversely affect the germination and growth of neighbouring plants by disrupting their energy metabolism, cell division, mineral uptake and biosynthetic processes. It is also an extremely water guzzling plant. Eucalyptus was first introduced in India before the turn of 20th century as a source of raw material for paper. Since 2000, paper mills have started considering the added value of these pulpwood plantations are that they act like “carbon sinks”. In 2004 the Veda CDM Company, an affiliate of the World Bank’s Biocarbon Fund, approached JKPL  to contract out eucalyptus plantations under the CDM . As of July 2011, Veda claims that about 600 hectares of eucalyptus plantations in Orissa are under the CDM.

Who is profiting?

India promotes a “green economy” to generate public acceptability of the carbon sink idea. In essence, it seems to says to developed countries “Go and buy your gas-guzzling car since you can use our biofuel, and go release your GHGs since you can buy our carbon credits.” Not only does this scheme create a false sense of sustainability, it also opens up business opportunities for companies at the expense of local communities. Ironically, the CDM project most scrutinized here is named: ‘Improving Rural Livelihoods Through Carbon Sequestration by Adopting Environment Friendly Technology Based Agroforestry Practices’. In the project design document (PDD) it is stated that farmers are supposed to benefit from the carbon credits. In the JKPL-Veda-farmer contractual agreement, validated by the World Bank, a certain percentage of the carbon credits are supposed to accrue to farmers as additional income. Yet farmers in at least seven villages in the Rayagada district who were “tricked and trapped” (as they described it) to plant eucalyptus, were never even told about their role in carbon sequestration, the credits they could earn, nor the income they could receive from it. It was agreed that the implementing company would receive carbon credit proceeds from the World Bank’s Bio-carbon Fund which it would then transferr (at least 80% in the case of the Farmer-JK-Veda agreement) to the farmers’ accounts. The revenue share for farmers was expected to range from INR 150-200 (EUR 2.3-3) per tonne or about INR 5,000-7,000 (EUR 77-108) per acre.

Needless to say, farmers in the villages of Rayagada cannot help but suspect that JKPL might be deriving double profits from the eucalyptus that they are growing – from paper production to carbon credits – and trying to keep them in the dark about it. Companies participating in the CDM are supposed to provide relevant technologies and guidance. But farmers continue to complain they are never told about the negative effects of eucalyptus in agriculture or the environment in general.

Land grab of a different sort

When farmers are pushed into bankruptcy and left with nutrient-depleted soil and water resources that make growing food difficult, it is no less than a land grab. As Apparao Hikoka argues, he may have the land, but it is nothing more than dead earth. As these farmers’ accounts show, there is nothing which is either clean or developmental in JKPL’s eucalyptus plantation – whether it’s to make paper or sequester carbon, and it hardly contributes to their economic wellbeing. The situation they find themselves in is falling into a painful monoculture trap with unceasing mental violence that will take them a long time to forget.

Living Farms works with peoples’ movements and tribes to protect their land and agriculture from being taken over from industrialization. Its goal is to promote local resource based ecological agriculture. You can contact the author at:

Parts of this article originally appeared in Leisa India, December 2011, Volume 13 No. 4. The story was also featured by the Third World Network.