JK Papermill

Project full name

Improving Rural Livelihoods Through Carbon Sequestration By Adopting Environment Friendly Technology based Agroforestry Practices

CDM Project number

4531

Description

The project implements reforestation on 1607.7 ha of land belonging to 1590 farmers in the states of Andhra Pradesh and Orissa. The project is financed by the project participants, namely:, VCCSL, JK Paper Ltd and the participating farmers. Farmers are encouraged to plant eucalyptus trees on their farming lands to produce raw materials for paper production that will be processed by JK Papermill. The farmers contribute to the project in form of land and labour supplies in the establishment of tree crops. The resource poor farmers are also contributing their savings as investment in the plantation activity. Accordingly, the beneficiary farmers themselves out of their savings or through loans meet the plantation establishment cost.

The project activity shall mobilize resource-poor farmers to raise tree plantations on farmlands. It proposes to link resource poor farmers and end users of wood products in order to optimise the land use and to facilitate the co-ordination of wood producers, agronomists, financial institutions and non-governmental organizations to improve the livelihood opportunities of rural households. The project activity is implemented on the degraded farmlands or lands used for rainfed subsistence agriculture.

Report summary

Key promises made by project proponents:

  • promotion of local financing arrangements for restoration of degraded lands by resource-poor farmers to meet the cost of plantation and maintenance
  • generation of additional income from carbon credits to the farmers
  • development and strengthening of the capacity of various stakeholders: resource-poor farmers, governmental and non-governmental organizations through training and technical assistance to take advantage of the international mechanisms
  • conservation of biodiversity through reduced dependence on natural forests by producing raw material for housing, construction and industry on private lands through plantation forestry

Situation on the ground:

Afforestation and reforestation projects describe the direct conversion of non-forested land to forested land through planting, seeding or human-induced promotion of natural seed sources. The impacts these projects can have on local farmers is especially evident in the case of the JK Papermill CDM project. A closer look at this project and the underlying rules reveals that participating companies can easily shift the financial risk of a project to participating local communities and farmers. If the project does not generate tradable carbon credits, the financial risk lies solely on the farmers. Even if carbon credits materialize, the revenue does not cover the financial obligations out on the farmers. In the Project Design Document (PDD) it was outlined that the project activity would generate additional income from carbon credits to the farmers, encouraging taking loans. This is a serious issue regarding the responsibility of participating entities that put the livelihoods of marginal farmers at risk because of a risky CDM forestry project. Many small farmers are negatively impacted by this project as they cannot payback the loans they took to start eucalyptus plantations. Successfully motivated by the company and middlemen, farmers face financial losses and food shortages as farm land is degraded due to the eucalyptus monoculture. The generation of additional income from carbon credits to the farmers was not achieved for resource poor farmers that now stay indebted.

Afforestation & reforestation

Project participants

  • India: 
  • M/s VEDA Climate Change Solutions Ltd; M/s JK Paper Ltd
  • Canada (Party withdrawn from Kyoto Protocol effective 15/12/2012):
  • Government of Canada – Ministry of Foreign Affairs and International Trade
  • France:
  • Eco-Carbone S.A.S
  • Italy: 
  • Government of Italy – Ministry for the Environment, Land and Sea
  • Japan: 
  • Idemitsu Kosan Co.,Ltd.
  • Japan Iron and Steel Federation (JISF)
  • Japan Petroleum Exploration Co.,Ltd. (JAPEX)
  • The Okinawa Electric Power Co.,Inc.
  • Sumitomo Chemical
  • Sumitomo Joint Electric Power Co.,Ltd
  • Suntory Holdings Limited
  • The Tokyo Electric Power Co., Inc.
  • Spain:
  • Kingdom of Spain – Ministry of Agriculture, Food and Environment and Ministry of Economy and Competitiveness
  • Luxembourg:
  • Ministry of Sustainable Development and Infrastructure

Registration date

28 February 2011

Carbon credits issued to date

79.811

Exact location

Koraput, Kalahandi and Rayagada
Visakhapatnam, Vizianagaram and Srikakulam
Orissa
India

Relevant links at UNFCCC website

PDD
host country letter of approval
validation report

Sustainable development benefits

social well-being

sustainable development benefits according to claims made by project developers:

  • development of institutional mechanisms for implementing A/R CDM project activities
  • promotion of local financing arrangements for restoration of degraded lands by resource-poor farmers to meet the cost of plantation and maintenance
  • identification of resource-poor farmers and to improve their awareness to tree growing
  • improvement in productivity of degraded lands under the project activity through a participatory approach involving local farmers, JK Paper Ltd, and VEDA Climate Change Solutions Limited (VCCSL)
  • development, testing and dissemination of best practices in plantation and agro forestry to minimize risks (fire, pests, insects and disease) and maximize environmental and social benefits
  • provision of seedlings raised from clonal technology to the farmers to raise plantations
  • promotion of farmer-industry partnerships with buy-back arrangements to purchase wood
  • generation of additional income from carbon credits to the farmers
  • development and strengthening of the capacity of various stakeholders: resource-poor farmers, governmental and non-governmental organizations through training and technical assistance to take advantage of the international mechanisms

sustainable development benefits according to reports:

Jobs

  • income generation:
  • company officials from JK with the help of some middle men (mostly big land holders who have benefited from eucalyptus plantation) successfully motivated poor and marginal land holding farmers to start eucalyptus plantations giving promises of high profit despite drought conditions
  • farms fail regularly to make more profit due to the frequent occurrence of droughts
  • farmers were informed that there would be 3 cycles of crops, the first crop to be yielded after 3 to 4 years, each cycle fetching about Rs.15,000 to 20,000
  • farmers were assured that the loan amount given to them would be cleared after cutting of the first crop, four years after starting the plantation
  • most of the small and marginal farmers have suffered losses due to draughts and remain indebted
  • the average income of the farmers from one acre of plantation, as can be derived from the discussions, is about 5500 rupees; deducting the labour cost and the interest paid for the loan, the income would be is less than 3000/-rupees per acre
  • the amount many small farmers generate from eucalyptus plantation is not even enough to repay their loan

Welfare

  • community upliftment:
  • company helped to arrange loans from the local banks like the State Bank of India (SBI) and Utkal Gramya Bank (UGB) for the farmers to meet various expenses of for the plantation
  • the loans provided saplings to the farmers, deducting the cost of saplings from their respective loan amounts
  • farmers can’t repay their loans, as they do not get good harvest from the seedlings , which is creating new dependency
  • terms and conditions of the loan, the plantation as well as and the buyback arrangements have never been discussed with the farmers
  • there are no paper contracts with the farmers which can help them sue the company for the false promises it made
  • participating companies can easily shift the financial risk of this CDM project to participating local communities and farmers
  • facing the threat of growing an eucalyptus monoculture, farmers are left with nutrient-depleted soil and even scarcer water resources that make growing food difficult
  • as a result of this project, many small farmers are bankrupted and indebted

environmental well-being

sustainable development benefits according to claims made by project developers:

  • conservation of biodiversity through reduced dependence on natural forests by producing raw
    material for housing, construction and industry on private lands through plantation forestry

sustainable development benefits according to reports:

Water

  • accessibility of water:
  • calyptus is an extremely water intensive plant, utilising much of the scarce local groundwater needed for food production

Land

  • tillage:
  • monoculture plantations decrease soil nutrients and reduce crop potential
  • eucalyptus is an inappropriate inter-crop species in agroforestry systems, which 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

Local stakeholder engagement

local stakeholder consultation according to information given in the PDD:

  • Comments by primary stakeholders have been invited using PRA methodology. Ten villages were investigated using the PRA which included the following processes:
  • Registration of farmers through personal contact: A project leaflet has been prepared with the brief introduction of the project objective, main activities, benefits and potential risks, as well as the modalities and procedures of the CDM A/R project. The leaflet was distributed to the communities and was explained during the PRA process
  • Seminar of farmers’ representatives. To get comprehensive information of the historic and current situation and existing problems of local communities, as well as to understand the need and desire of local farmers, a meeting of farmer representatives was held in each selected village. Participants included village headers, farmer representatives, etc. Favorable tree species were also discussed and listed by scoring in the meeting
  • Questionnaire: Questionnaires were developed and distributed among different stakeholders, 10-15 households randomly selected from each selected village, local institutions, etc. The questionnaires were collected and analyzed to understand the local socio-economic profiles, land use, land tenure, income and sources, land management ways, awareness, technical know-how, favorable tree species, technical and financial barriers, need and desire of farmers to participate in the proposed A/R CDM project activity. These questionnaires will be made available at the time of validation
  • Interview: Various stakeholders involved in the proposed A/R CDM project activity were interviewed. 10-15 households randomly selected from each selected village were also interviewed using semi-structured approach
  • The data from the secondary stakeholders was collected during meetings held with the World Bank team during October, 2005 and also during interaction with the Environment Team of the World Bank, New Delhi as part of Environmental Safeguards Review during January, 2006 and August, 2006

local stakeholder consultation according to reports:

Villagers directly impacted by the project activity have not been invited to the local stakeholder consultation and have not been informed about this CDM project. Farmers complain about the fact that they never have been told about the negative effects of eucalyptus on agriculture as well as regulations about carbon credits generated by the project activity. The local stakeholder consultation was inconclusive and did not inform all potentially affected stakeholders in a sufficient way.

Sources and Materials

Sources

Organisations working on project

  • Water Initiative Odisha

Last update

03.12.2014


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