50 per cent of net present value of forests should go to communities, says report…
Industry and Government bodies that need to divert forests for non-forest purposes may soon have to shell out more money, and communities dependent on forests might gain some benefits. The Centre is set to revise the net present value (NPV) of forests. When forest is diverted for non-forest use, the developer pays for compensatory afforestation. In addition, the Government charges the developer NPV to compensate the forest’s lost ecosystem services till the afforested area starts providing comparable benefits. At present the Government has fixed NPV between Rs 4.38 lakh and Rs 10.43 lakh per hectares (ha), depending on the type and density of forest. In 2008, while approving the amount, the Supreme Court had asked the Government to revise the rate of NPV every three years. In November last year, the Union Ministry of Environment and Forests (MoEF) assigned the task to the Indian Institute of Forest Management (IIFM). In its report, IIFM says NPV was grossly underestimated and suggests a hike NPV by 35 to 433 per cent. IIFM’s proposed NPV rate ranges from Rs 9.87 lakh to Rs 55.55 lakh per ha.
The increase, the report claims, is based on the economic value of many forest goods and services that were not valued earlier. This includes timber, bamboo, non-timber forest produce, fuelwood, fodder, bioprospecting, carbon sequestration, carbon storage, water recharge, soil conservation, water purification, pollination and seed dispersal.
The current NPV is estimated for forests categorised into six eco-classes, or forest types, and three canopy cover density classes—very dense forest, moderately dense forest and open forest. IIFM has categorised forests into 14 forest types and four canopy cover density classes, including scrub forests, and calculated the revised NPV. While the current NPV is calculated by taking 20 years as the rotation period of forest, the revised NPV estimates the rotation period for each unit of classification based on dominant tree species.
Communities might get their due
The report is not just about revising NPV rate, it also suggests how the fund should be used. For instance, at present the NPV amount goes to the State Government, which spends it on forest and wildlife management and developing infrastructure. There is no mechanism to compensate the communities dependent on the forest. “That is why we have suggested decentralisation of fund disbursement,” says Madhu Verma, professor at IIFM and lead author of the report.
Based on estimates of proportion of benefits of all forest goods and services, the study estimates that about 50 per cent of the economic losses of forest diversion occur at the community level. “A number of projects where forest land is proposed to be diverted face local resistance due to the inability of the current mechanism for compensating the loss of livelihoods and other benefits by the project affected people and communities,” the report notes. It thus recommends that 50 per cent of the fund should be allocated for affected communities, 34 per cent should go to the State Government and 16 per cent to the Centre’s coffers. It, however, recommends a separate study to figure out the feasibility of this mechanism.
It suggests adding a premium to NPV rates in case of hilly areas and forested wetlands where the ecosystem services of forests are higher. The NPV value should be five and three times higher in case of eco-sensitive zones around national parks and sanctuaries.
The report also recommends charging a “possession value” of land for the forest land in urban and peri-urban areas, in addition to the NPV, based on the market value or the Government rate of the land in the vicinity. “While in case of forest diversion the user agency does not get the ownership right, many a times the forest land is gone for ever,” says Verma. Possession value of land will compensate for the loss of land apart from NPV of forest. The Ministry has put up the report on its website for public comments.
Conspiracy Theories Abound
The Government is not providing market linkages or support price after deregulating trade in the minor forest produce. The traders and the Forest Department earn huge amount of money from the tendu leaf trade. A lot of illegal money is also involved. Since this was an experiment done on pilot basis, they seem to have been preparing a case study to show that deregulation of tendu leaves will not work, say actvistits…
The Odisha Government apparently wants to ensure that forest dwellers in the State do not demand ownership rights over tendu leaves, a lucrative forest produce. This became obvious when Narigaon, the first village in the State to attempt trade in tendu leaves, failed to even recover the money it invested in procuring and processing the leaves for lack of buyers. The Government did not provide the village with market linkages or support price for their product, despite repeated requests.
Tendu or kendu leaf, used for rolling bidis, forms a major part of the Forest Department’s revenue in the State. Its kendu leaf division procures the leaves from the forest dwellers in exchange for collection wages and the Odisha Forest Development Corporation (OFDC) sells them to contractors through tenders. For some forest divisions, the auction is held in advance and the procurement is done by the traders from the villages directly. The wages earned by the forest dwellers under this system is, at times, less than the Government-fixed rate of daily wages. The Forest Department earns large profits from the trade.
The Forest Rights Act of 2006 make this practice illegal by recognising the right of forest dwellers to own, manage and sell minor forest produce such as tendu leaves and bamboo. Many villages in the State, including Narigaon, have demanded rights over community forest resources, including MFPs under the Act. Even then, Odisha, like many other States in the country, has been reluctant to relinquish its monopoly over tendu leaves and bamboo.
It came as a surprise when in April last year, just a month before the start of tendu leaf procurement season, the State deregulated tendu leaf trade in Navrangpur, one of the tendu leaf divisions, on “pilot basis to see how it works”. The villages were given the option of either giving the tendu leaves to the kendu leaf division of the Forest Department in return of wages as usual or procuring and selling the leaves to traders through the palli sabhas (village councils). “Activities like pruning, procurement and processing of leaves require a lot of working capital. Since most of the villages were not prepared for this investment, only one—Narigaon palli sabha—came forward to take up the trade,” said Chittaranjan Pani, a forest researcher in Odisha.
Stocks pile up
The Narigaon palli sabha raised some working capital through contributions and collected 370,000 kerries (one kerry equals 40 leaves) of tendu leaves from the village forest. The total procurement cost of the tendu leaves came to Rs. 4.44 lakh, but it could only pay Rs. 77,000 to the pluckers. Then there was the expenditure of Rs. 120,000 on processing and transportation of leaves. At the prevailing market rates (at which the forest development corporation sells to the traders), the palli sabha would have earned more than Rs. 12 lakh from the sale of leaves. After paying all the dues and cutting the expenditure, the palli sabha had planned to distribute a part of the profit among the pluckers and spending rest on the village development.
However, no trader has turned up in the village to buy the leaves. “For the last two-and-a-half months the stock is piled up in a rented godown. No trader is willing to buy. Those who do offer too little a price. That will not even pay for the expenditure that we have already incurred,” said Eswar Manjhi, a resident of Narigaon.
The traders have been citing all sorts of reasons for not buying their leaves such as validity of transit permits issued by the palli sabha in other States and poor quality of leaves. Earlier, it was the Forest Department that had the sole authority to issue transit permits for forest produce to be transported out of the forests. New rules of FRA, amended in September last year, empower gram sabha to issue such permits for MFPs. “The transit permits issued by palli sabhas are often challenged by the Forest Department within the State. Most of the traders who buy tendu leaf from Odisha come from other States and express doubt that transit permits issued by gram sabha will not be accepted by the Forest Departments in other States,” said Pani.
Conspiracy theory gains strength
Bidyut Mohanty of Koraput-based non-profit SPREAD sees a conspiracy in this. “All these issues should have been sorted out by the Government before deregulating the trade. As the demand for deregulation was being raised by forest dwellers throughout the State, they cleverly chose Nabrangpur division which generally has poor quality of leaves and does not give much revenue to State for this. They suddenly announced deregulation at the time when plucking season had already started. There was no capital fund provided for palli sabhas, no capacity building was done,” he said.
The traders and the Forest Department earn huge amount of money from the tendu leaf trade. A lot of illegal money is also involved. Since this was an experiment done on pilot basis, they seem to have been preparing a case study to show that deregulation of tendu leaves will not work, he said. This is evident from the fact that Narigaon has not got any support from the Government so far for selling the tendu leaves despite their requests. The amended rules of FRA mandate the Government should provide “post claim support and hand-holding to holders of forest rights”.
“Narigaon Palli sabha wrote several times to the authorities to help them sell the tendu leaves in last two months. They suggested that the OFDC should conduct auction of their leaves along with those of kendu leaf division. In return the village was even offering a five per cent commission to the corporation. The Forest Department said it does not have any role to play after the deregulation of the trade. The State tribal welfare department did write to the district authorities to take necessary steps to help the palli sabha but did not specify what steps. So far, no help has come,” said Pani.
Officials shrug off responsibility
Siddhanta Das, managing director of OFDC said the corporation does not have the mandate to sell the products of any agency other than the Forest Department, and that he has not got any instructions from the Government. “We ourselves are facing problem in selling tendu leaves collected by the kendu leaf division from Nabrangpur. Only 300-400 quintal leaves could have been sold out of 15,000 quintal leaves collected here. Maybe it is because we cancelled the advanced tenders of the traders in order to deregulate the trade in Nabrangpur, that the traders are not turning up to buy the leaves from this division,” he said.
Yamini Sarangi, district collector of Nabrangpur said there was little the administration could do in the matter of Narigaon. “The tendu leaves have already been procured by a group of people on behalf of gram sabha. It was the responsibility of these people and the gram sabha to pay the pluckers and find buyers. The Government had already given the people the option to sell the leaves to the kendu leaf division. Once it is procured by the third party we do not have much role to play,” she said.
Pani, however, clarified that the palli sabha had formed a ten member committee to procure and sell tendu leaves through a resolution. “By calling it individual effort, the administration is trying to give it a different picture,” he said.