Model bankable project on Eucalyptus based agroforestry (Useful for IBPS AFO & NABARD Exam)

Model bankable project on Eucalyptus based agroforestry 

Source: National Bank for Agriculture and Rural Development 

Useful for : IBPS AFO Mains Exam (Agriculture Knowledge), NABARD Asst. Manager Exam

 

1. Introduction 

• Eucalyptus is one of the fastest growing trees in the world and belongs to the family Myrtaceae. ★★★

• Eucalyptus is popularly known as Gum tree, Red iron tree, Nilgiri or Safeda. ★★★

• Many of the eucalyptus species are known for its greater heights. ★★★

• Eucalyptus amygdalin is the tallest known tree with specimens attaining a height of as much as 480 feet.★★★

• Even though a native of Australia, Eucalyptus was introduced in India, by the British in 1843 in Nilgiri Hills as an experimental basis to find high yielding species for fuel and timber.★★★

• Eucalyptus soon became a favoured species for the foresters, owing to its fast growth, non- browsable, drought resistant, adaptability to a wide range of soil and climatic conditions.★★★

• In recent times, many superior hybrids have been identified through rigorous research and development efforts by many research institutes and pulpwood industries.

• Eucalyptus hybrids/ clones yield better and can be harvested profitably in 4-5 years.

• Some of the commercially important species with a clean bole, compact crown and high yield are Eucalyptus camaldulensis, E. pelleta, E. urophylla and Eucalyptus hybrids (E. tereticornis x E. grandis / E urophylla / E. camaldulensis).

• Recently, Eucalyptus urophylla x E. grandis hybrid named as Eucalyptus urograndis has shown high vigour and yield and is highly recommended for commercial plantation.

 

2. Botanical Features 

• Eucalyptus is a fast growing, medium-sized to tall tree attaining 20-50 m in height and upto 2m in diameter.★★★

• The tree has a tap root system with mycorrhizal associations which increases its ability to draw nutrients and water.

• The morphological features of the tree varies with the species.

• While E. tereticornis and E. camaldulensis have a smooth silvery white stem, E. pelleta and E. urophylla have dark leathery bark.

• The leaves are leathery to smooth in texture, hang obliquely or vertically and are studded with glands containing aromatic oil.

• Flowering takes place during July-August.★★★

• Flowers in bud are covered with a cup- like membrane (hence the name of the genus, derived from the Greek ‘Eucalyptus’ meaning- ‘well covered’), which is thrown off as a lid when the flower expands.

• The fruiting occurs during September - October.★★★

• The fruits are surrounded by woody, cup-shaped receptacles and contain numerous minute seeds.

 

3. Silvicultural Characteristics 

• Eucalyptus is a versatile, fast growing and strongly coppicing tree possessing a wide range of soil and climatic adaptability.★★★

• Eucalyptus is known for its drought hardiness, although annual rainfall of 800 mm is preferred.★★★

• The species is also moderately salt tolerant and relatively fire resistant.★★★

• The species is known to suffer chlorosis and die back due to the reduced iron absorption in alkaline soils.★★★

• The species grows under a wide range of climatic/soil conditions from warm to hot, sub humid to humid and from good to degraded soils.

• Eucalyptus grows best under light red sandy/ alluvial soils.

• Under heavy black cotton soils, E.urophylla and E. urograndis are the best suited species.

• For commercial plantation, the best suited species for different rainfall zones is indicated below: Dry zone (rainfall < 1000 mm) E. camaldulensis, E.tereticornis, E. urograndis (specific clones) Wet zones (rainfall > 1000 mm preferably 1500-4000 mm) E.pelleta, E.urophylla, E. urograndis (specific clones) 

 

4. Nursery practices 

• Eucalyptus can be easily propagated from seeds as well as vegetative propagation by cuttings (clonal propagation).★★★

• Genetically superior clonal planting stock offers many distinct advantages compared to seedlings obtained from normal seed like uniform size, high genetic gains, site specific adaptation, high productivity, short rotation, pest and disease resistance.

• In addition to this, the improved silvicultural and management practices offers a huge advantage of clonal adaptation in the field for better yield.

Propagation through cuttings 

• Propagation is highly beneficial to multiply the selected plus tree/ superior clone and get uniform growth.★★★

• For clonal multiplication the superior clones are selected and maintained in Clonal Multiplication Area (CMA) under coppicing/ pollarding to yield juvenile shoots for vegetative propagation.

• Generally, a cutting size of 4” with two nodes is taken for propagation.

• However, single node cutting of 2-3” is also used with good results.

• The leaves of the cuttings are clipped to half to reduce transpiration.

• The cuttings are then dipped in solution of 2% fungicide (10 min) followed by root hormone treatment (IBA).

• The cuttings are put in a polythene bag/ root trainer having 1:1 soil and sand and are maintained in a mist chamber at 25-30^oC and 80% humidity.

• The roots develop in 20-25 days.

• Thereafter the rooted ramets are hardened in shade for about 15 days, after which they are maintained in an open nursery till they are maintained for 2-3 months before planting in the field.

• Plants at nursery stage are highly susceptible to damping off and other fungal diseases, which can be limited by strict attention to hygiene, reducing watering and shade and allowing good ventilation.

 

5. Soil preparation and planting 

• The plantation area must be subjected to dozing (in case of bushes/ stumps) followed by 2-3 deep ploughing either ripper or mouldboard plough.

• Compartmental bunding in the arid zones.

• Soil should be treated with an anti-termite mixture to avoid any termite infestation.

• The spacing recommended for commercial plantation of Eucalyptus is 1.5m X 1.5m (1.5m X 1.5m row to row spacing and 2 m x 2 m plant to plant spacing), or 2.5 m X 1.8m, accommodating 2222 trees/ha.★★★

• The spacing should give enough scope for tractor ploughing in between the rows thereby reducing cost of soil working in the latter years, as also provides sufficient scope for raising inter crops between the rows for added income.

• Under agroforestry models, wider spacing of 4m x 2m ; 6m x 1.5m or 8m x 1m is recommended.

• For raising plantations in dry zones through seedlings, lesser spacing of 2m x 2m; 2.5 m x 1.6m or 3m X 1.4m accommodating 2500 plants / ha. may also be followed.

• Nursery raised seedlings/ clones may be planted at the onset of monsoons, directly in the trenches created from soil ripping.

• Before plantation, the plantlet may be dipped in cow dung slurry fortified with bio-fertilizers viz.

• Azotobacter and Azospirillum which improves the availability of nutrients to the plant.

• 50 gm per plant of neem cake can be applied to control the termite attack.

• Casualty replacement should be done one month after planting.

 

6. Fertilizer application 

• Owing to its fast growth, Eucalyptus is a heavy feeder and requires supplements in form of organic and chemical fertilizers in successive yeaRs. Application of Diammonium Phosphate 50 gm or NPK 50 gm per plant should be applied for initial 2- 3 years.

• In the first year the fertilizer should be given in two split doses viz. 1^st dose after 15-20 days after planting and 2^nd dose after 1 month of the application of the first dose.

• The 2nd/ 3rd year application is given in a single dose.

 

7. Weeding 

• Eucalyptus is intolerant to shade and does not compete well with grasses for water and nutrients, thus 2-3 weedings and soil working after ploughing for the first 2 years is essential for good growth and better yield.

• As a biological control of weeds, it is advisable to raise leguminous crops in between the rows of the plantation.

• A successful cost effective silvipastoral model includes broadcasting seeds of leguminous fodder viz. Stylosinthes scabra, S.hamata, S.bicarea, etc. between the rows after plantation.

• The fodder grass improves the soil condition by fixing Nitrogen and also provide nutritious fodder for the cattle.

 

8. Casuality replacement 

• Casuality replacement or Beating-up operations should be done immediately within 3-12 months after planting.★★★

• Otherwise, the eucalyptus crops will reach more height which will affect the replanted plantlets by shading thereby hampers its growth.

 

9. Irrigation 

• Protective irrigation is essential in the first year of plantation, in case of monsoon failure.

 

10. Rotation/ Harvesting 

• Eucalyptus, generally raised for industrial plantations - mainly pulpwood and poles are maintained with a shorter rotation.

• In Eucalyptus the fiber length increases consistently with age, however the rate of increase declines after five years and attains more or less constant value.

• Therefore, Eucalyptus can be profitably maintained at rotation of 5 yeaRs. Harvesting is done by clear felling the stand.

 

11. Coppicing 

• Once the tree is felled, the stump throws many coppice shoots.★★★

• These should be singled out to keep only 2-3 vigorous stems per stump, which will form the second crop.

• It is advisable to change the planting stock after the third harvest, as there is loss in vigour in coppice and is not economically recommended.

 

12. Plant Protection Measures 

• One of the most serious diseases of Eucalyptus in recent times is the gall formation caused by gall wasp, an ant-like insect that lays eggs in new branches or in the midribs of the new leaves.

• This can be addressed by releasing natural parasitoids (Megastigmus viggiani) or planting gall resistant clones.

• It is also affected by canker which caused by fungus, Corticium salmonicolour known as pink disease.

• This can be controlled by application of Bordeaux mixture.

• Other fungal pathogens known to cause damage include, Ganoderma lucidium, Endothia gyrosa and Cylindrocladium spp.

• Stem canker caused by Cryphonectria and Cytospora eucalyptiocola which can cause heavy mortality.

• This can be controlled by the application of bordeaux mixture.

• Among other insects, Ceranbycis beetle, Celstems scabrator is reported to attack young plants in plantations.

• Subterranean termites are reported to damage seedlings and young plants of the species.

• This can be controlled by the application of nimbisides 2 ml per litre.

 

13.Intercropping in Eucalyptus plantation 

• For getting the additional income, farmers can grow annual crops like soyabean, wheat, stylo with eucalyptus trees for the first two years.

• After that any shade loving crop can grow like ginger, turmeric or any medicinal plants like sarpagandha, kaalmegh, isabgol, gudmar etc. can be cultivated along with the eucalyptus tree.

• The cost of cultivation of intercropping is not considered under unit price calculations because of two reasons.

• Firstly crops are generally covered under short term finance schemes which may be covered under NABARD’s Kishan Credit Card to give advantage to small and marginal farmeRs. Secondly, the unit cost of each crop suggested is already available to all banks with the help of NABARD.

• The remaining area after plantation may be covered under crop and accordingly finance will be availed.

 

14. Yield 

• The yield of traditional Eucalyptus under forest conditions is about 10-15 MT/ha.★★★

• However, use of seeds from selected superior planting material or clonles improves upto 25- 30 MT and 45-50 MT/ ha respectively (West Coast Paper Mills, 2000).

• However, tree improvement efforts by many paper mills of India, the average productivity of superior seedling plantation and clonal ramets under 5 years rotation in dry zone (rainfall <1000 mm) yields 45 MT and 80 MT respectively.

• While that in wet zone (rainfall > 1000 mm) yields 100 MT in recent yeaRs. 15.Coppicing After harvesting of eucalyptus tree, can be grow as a coppice for next rotation.

• Tree should be harvested during the spring season with medium stump height.

• It will induce the shoots, it should be reduced to two shoots per stump.

• Other management aspects may be carried out.

• During the 4th year coppice trees can be harvested and yield around 7- 12 MT/ Ha.★★★

 

16. Sale price 

• The farm gate rate for Eucalyptus varies from State to State and is based on market dynamics.

• Currently the market rate ranges from Rs. 1500/MT to Rs. 4500/MT (debarked wood) based on the size and age of the wood.

• Whereas wood below 5 cm diameter (under bark) Rs. 1500/MT and Rs. 3200/MT for mature poles (ballies) with diameter 15- 20 cm (under bark).

• The transportation cost of the wood is to the tune of Rs. 250- 300/MT.

• 17.Unit cost and Economics for all models: Unit cost (capitalized for 5 years) for raising Eucalyptus in wastelands through superior quality seedling and clonal material both in dry zone and wet zone has been worked out and presented below, together with the IRR, considering rotation of 5 yrs with 3 crops (1 +2 coppice) and farm gate price of poles at Rs. 2200/MT and fuelwood @ Rs. 1000/MT.

• The yield is expected to increase by 10% in first coppice and reduce by 10% in the 2nd coppice The details of techno-economic parameters and economics are furnished in Annexures.

• The investment has been found to be technically feasible, financially viable and bankable.

 

18. Repayment period/Interest rates 

• The bank loan is considered at 90% of the unit cost which is also provided in the table above.

• Year-wise loan disbursement details are given in the annexure.

• Income generation from the activity commences from fifth year onwards.

• The interest accrued during the gestation period will be deferred.

• The rate of interest to the ultimate borrowers will be decided by the financing banks which is subject to revision by RBI / NABARD from time to time.

• The repayment of principal with deferred interest will start from 4th year of plantation and will be paid upto 6th year maximum.

 

19. Commercial uses of Eucalyptus 

• Eucalyptus is one of the fastest growing trees and is an excellent raw material for paper and pulp, particleboard and hardboard industries.★★★

• Eucalyptus is also an excellent source of fuel wood and charcoal.★★★

• Eucalyptus wood is also used for light and heavy construction, railway sleepers, bridges, piles, poles and mining timber.

• Indian Standards are available for use of E. tereticornis timber, after treatment, for door frames, window shutters, furniture, cabinet, tool handles, packing cases and crates.

• Leaf extracts of the Eucalyptus species have pesticidal properties and can be promoted as a bio pesticide.★★★

• Leaf extracts of the Eucalyptus species are rich in essential oils that have many medicinal uses.★★★

• Eucalyptus globulus can be raised commercially for Eucalyptus oil.★★★

• E. tereticornis is a major source of pollen in apiculture and produces a medium amber honey of distinctive flavour.

• The wood and bark of the tree have a tannin content of 6-12% and 3-15% respectively, though not used as a commercial source of tannin.

• Eucalyptus is a large ornamental tree suitable for parks and avenue plantations.★★★

• Eucalyptus can be incorporated with groundnut, mung beans, pine apple, tea etc. as an intercropping.★★★

 

ANNEXURE I : Planting and spacing in Eucalyptus Farming 

• Usually the planting of seedlings of Eucalyptus is done after the regular monsoon season.

• The charts given below demonstrate the plant spacing, availability of crops and number of plants in a hectare.

• This is a farm forestry model with inter row and intra row spacing of plantation is 2 metre.

• With this spacing 2,500 plants can be planted in one hectare.

 

Model E: Farm forestry (1.5x 1.5m) 

ANNEXURE II Unit Cost for Clonal Seedling Eucalyptus cultivation (1 ha) Agroforestry model (4x 1.5x 1 m) 

• Techno-economic parameters 

• Species recommended Eucalypts hybrid 

• Spacing (m x m) is 4x1x1.5 ★★★

• Approx. No. of plants per ha is 3600 ★★★

• Mortality replacement 10% 

• No. of harvestable plants per ha 100% 

• Year of harvesting (year) is 5 ★★★

• Economic Life is 15 years ★★★

• Avg. wage rate per MD (Rs.) 200 

• Interest on term loan 12% Margin (of the total cost) for Bank Loan 10% 

• YIELD & INCOME: 

• Harvesting may be done 5th year onwards 

 

Assumptions: 

• 1. Protective / pot irrigation is provided during the initial years.

• 2. Seedlings: It is assumed that seedlings will be purchased from govt forestry nursery or from private nursery.

• 3. Labour Charges: Assumed average wage rate@ Rs.200 prevailing in the state 

• 4. Cost of cultivation provided for 1+2 years for all the crops (1 year for establishment +2 maintenance) 

• 5. Though the gestation period is 8-10 years, loan instalments provided for 4 years,the remaining years of gestation period bank may charge interest on the outstanding loan amount and the years in term may be kept separate and not to be compounded.

• Both the principal and interest can be recovered after the harvest.

• This is to be --- there is no income generation either from the main crop or inter crop.

• 6. Cost of intercropping is not covered under this structure.

 

Unit Cost for Clonal Seedling Eucalyptus cultivation (1 ha) Agroforestry model (8.5x 1.5x 1 m) 

Techno-economic parameters 

• Species recommended Eucalyptus hybrid 

• Year of harvesting (year) 5 ★★★

• Spacing (m x m) 8.5x1x1.5 ★★★

• Economic Life 15 years ★★★

• No.of plants per ha. 2000 

• Avg. wage rate per MD (Rs.) 200 

• Mortality replacement 10% 

• Interest on term loan 12% 

• No. of harvestable plants per ha 100% 

• Assumptions: 

• 1. Protective / pot irrigation is provided during the initial years. 

• 2. Seedlings: It is assumed that seedlings will be purchased from govt forestry nursery or from private nursery 

• 3.Labour Charges: Assumed average wage rate@ Rs.200 prevailing in the state 

• 4. Cost of cultivation provided for 1+2 years for all the crops (1 year for establishment +2 maintenance) 

• 5. Though the gestation period is 8-10 years,loan instalments provided for 4 years,the remaining years of gestation period bank may charge interest on the outstanding loan amount and the years in term may be kept separate and not to be compounded.

• Both the principal and interest can be recovered after the harvest.

• This is to be --- there is no income generation either from the main crop or inter crop.

• 6. Cost of intercropping is not covered under this structure.

 

Unit Cost for Clonal Seedling Eucalyptus cultivation (1ha) Agroforestry model (3x 1.4m) 

Techno-economic parameters 

• Species recommended Eucalyptus hybrid 

• Spacing (m x m) 3 x1.4 ★★★

• No. of plants per ha. 2500 ★★★

• Mortality replacement 10% 

• No. of harvestable plants per ha 100% 

• Year of harvesting (year) 5 ★★★

• Economic Life 15 years ★★★

• Avg. wage rate per MD (Rs.) 200 

• Interest on term loan 12% 

• Margin (of the total cost) for Bank Loan 10%

 

***