Agroforestry Systems 8:31-38, 1989. 31 © 1989 Kluwer Academic Publishers. Printed in the Netherlands.

Eucalyptus in agroforestry: its effects on agricultural production and economics

PARVEZ AHMED Haryana Forest Department, Social Forestry Division, Panipat-- 132103, India

Key words: eucalyptus, agroforestry, India

Abstract. The economics of eucalyptus in agroforestry and its effects on agricultural crops have been studied with the help of observations made during the harvests in agricultural fields and from the information supplied by progressive farmers. Three rotations of eucalyptus in agroforestry were selected for comparative study of its returns and relative loss to the crops, in order to ascertain the optimum rotation: i.e. the one giving the maximum internal rate of return with minimum loss to agricultural crops.

Introduction

Eucalyptus hybrid (E. tereticornis) is the main species used in extension forestry in the Indo-Gangetic plains. It was introduced into agroforestry in 1961. Very soon eucalyptus became an important agroforestry species due to its fast growing nature and its multiple uses. The farmers of this region planted eucalyptus mostly in a single row along the bunds of agricultural fields. This extension programme brought about a revolution in the econ- omic status of the farmers. The increased income of the farmers percolated into investments in land development and have had a beneficial effect on the entire rural economy of the region. Although this programme benefited the farmers in many ways, the effect of eucalyptus on agricultural production has always been a subject of discussion. Many farmers have reported an adverse effect of eucalyptus on agricultural production, but the extent of this adverse effect has not been quantifiable until now. Eucalyptus plantations provide a good shelter belt against winds and thereby benefit crops, to some extent, when they are grown in leeward areas, but overall there is a signifi- cant loss in the production of crops due to the shade cast by the trees, and this loss increases with the age of the trees.

The aim of the present study is to ascertain the pattern of loss in agricul- tural production with the age of eucalyptus trees planted along the bunds of fields. The economics of eucalyptus plantations and relative loss in agricul- tural crops have been discussed for three different rotations of 8, 9 and 10

32

years. The benefit-cost ratio and internal rate of return from wood produc- tion, taking into account the loss in crop production, have also been ev- aluated in order to discover the most suitable rotation for maximum internal rate of return from plantations, coupled with minimum loss to agricultural production.

Materials and methods

The data have been collected from the areas of northern Haryana. Land management in Haryana is on a killa basis. One killa is equivalent to one acre, measuring 220 feet by 198 feet. In the present study we selected those killas having all four boundaries planted with eucalyptus at a distance of 1.8 m. In the selected killas only wheat, rice and mustard were sown during the rotation of trees. Plots were selected at different locations in which farmers felled the trees at their own will. Areas of plots vary from 5 acres to 15 acres and hence the average number of trees planted on bunds per acre was taken as 100. The green weight of wood harvested after 8, 9 and 10 years and the quantity of agricultural production in the selected killas were recorded at the time of harvests. For some killas the information given by progressive farmers was also recorded. The wood production and crop out-turn per acre were calculated by averaging over the entire plot.

Results and discussion

Many authors [1-4] have reported the economics of eucalyptus planted in blocks. Mathur et al. [5] have published economic data for eucalyptus planted on bunds in agroforestry, but they ignored the loss in agricultural production due to the trees. The present communication deals with the loss in agricultural production as a function of the different ages of eucalyptus trees, which is a prominent factor in the economics of eucalyptus in agroforestry. It has also taken account of the economic values of different sizes of wood based on its utilisation. For convenience in description the rotations of 8, 9 and 10 years have been denoted as R 1 , R2 and R3, respect- ively.

(a) Cost of plantation

The cost of plantation for 100 plants in one acre at a wage rate of Rs. 16 per day is Rs. 170.00 in the first year. Rs.45 is spent in the second year for replacement of failed plants and for maintenance.

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(b) Benefit from wood production

The average out-turn of wood per acre from plots of R l c a m e out at 18.86 tons and those for R2 and R 3 w e r e 21.15 and 23.35 tons, respectively. The average price of wood was calculated according to the economic values of different sizes of wood. Following the utilisation trend, eucalyptus wood of 20 cm. diameter and above is classed as timber and the average price of this class is Rs. 600 per ton. Wood having a diameter of 20 cm. to 10 cm. is used in pulp and its average price is Rs. 360 per ton. The wood of diameter less than 10cm. is used as firewood, with an average price of Rs. 250 per ton.

It was found from the studies of felled wood from various plots under study that, on average, an 8-year old tree provides 26 percent timber, 54 percent pulp, and 20 percent firewood. This ratio is 35, 48 and 17 in the case of R2 and 46, 36 and 18 for R3, a s shown in Table 1. Taking into consider- ation the values of all sizes of wood, the average prices of wood from the trees of R1, R 2 and R 3 amount to Rs. 400, 425 and 450 per ton respectively. These rates are in reasonable agreement with that prevalent in the market. Table 2 shows that, on the basis of these rates, the average value of wood per acre from trees of R I , R 2 and R 3 a r e Rs. 7544, 8988 and 10507 respect- ively. Taking a tree survival rate of 80% at rotation, the average price per tree after rotation will be approximately Rs. 94, 112 and 132 for R~, R~ and R3, respectively. If the total value of wood is distributed over the rotation, the benefit from wood per acre per year for R~, R2 and R3 become Rs. 943, 998 and 1050, respectively.

( c ) Loss in agricultural production

Records of farmers of different plots under study have revealed that the net average annual income per acre from bare agriculture is around Rs. 2000, which is in agreement with the figure recorded by Mathur et al. [5]. The

Table 1.

Rotation Av. percentage of Av. percentage of Av. percentage of Av. rate of wood in years timber by weight, pulp by weight, fuelwood by with the rates of

Diameter 20 cm Diameter in be- weight. Diameter timber, pulp & and above tween 20 cm and below 10 cm fuelwood as

10cm Rs. 600, Rs. 360 & Rs. 250 per ton Rs.

8 26 54 20 400 per ton 9 35 48 17 425 per ton

10 46 36 18 450 per ton

4~

Tab

le 2

. A

vera

ge w

ood

prod

ucti

on a

nd l

oss

in a

gric

ultu

ral

prod

ucti

on p

er a

cre

for

thre

e di

ffer

ent

rota

tion

.

Rot

atio

n A

vera

ge

Tot

al

Ret

urn

per

Ave

rage

T

otal

los

s* i

n T

otal

los

s in

w

ood

pro-

re

turn

ye

ar f

rom

pe

rcen

t lo

ss

net

retu

rn f

rom

ne

t re

turn

fro

m

duct

ion

from

w

ood

per

year

in

agri

cult

ural

ag

ricu

ltur

al

afte

r ro

ta-

woo

d pr

oduc

tion

ne

t re

turn

cr

ops*

dur

ing

crop

s w

ith

tion

pr

oduc

tion

fr

om a

gri-

ro

tati

on

10%

cum

u-

cult

ural

la

tive

inte

rest

pr

oduc

tion

ye

ars

ton

Rs.

R

s.

Rs.

R

s.

Net

ret

urn

from

w

ood

prod

ucti

on

at t

he e

nd

of r

otat

ion

Rs.

An

nu

al

net

retu

rn

from

w

ood

prod

ucti

on

Rs.

8 (R

~)

18.8

6 75

44.0

0 94

3.00

12

.05

1928

.00

2305

.20

9 (R

2)

21.1

5 89

88.7

5 99

8.75

16

.01

2881

.80

3491

.65

10 (

R3)

23

.35

1050

7.50

10

50.7

5 19

.67

3934

.00

4905

.00

5238

.80

5497

.10

5602

.50

654.

85

610.

79

560.

25

* N

et r

etur

n fr

om a

gric

ultu

ral

crop

s ha

s be

en t

aken

Rs.

20

00

/-

per

acre

per

yea

r.

35

agricultural production during the rotation of trees shows a pattern of continuous decrease with the increasing age of the eucalyptus trees.

In the first two years after plantation the effect of trees on crop production is almost negligible. But from the 3rd year onwards the loss in crop pro- duction starts to predominate. In the plots of R1, the average loss in crop production in one killa in the 3rd and 4th years is 8.2%. It increases to 13.6% in the 5th and 6th year and increases further to 26.4% in the 7th and 8th year. If these percent losses are averaged over the rotation, the average loss in crop production per year for R~ becomes 12.05%. At this rate the loss in net return from crop production per year per acre will be Rs. 241. After 8 years the loss in crop production increases rapidly. In the 9th year the average loss in R: is as high as 45.6% and the average loss in crop pro- duction per year comes out at 16.01% (Rs. 320 per acre). In the case of R 3 the average loss in the 9th and 10th years is 48.8% and the average loss in crop production per year comes out at 19.67% (Rs. 393 per acre). Table 2 shows that the total loss in net return from crop production during rotation is Rs. 1928, 2882, and 3934 for R~, R2, and R3, respectively. If these losses are calculated with a 10% cumulative annual interest, then, at the end of rotation, the cumulative losses in agricultural production will be Rs. 2305, 3492, and 4905 for RI, R2, and R3, respectively. The loss in crop production increases rapidly in the 9th and 10th years, which shows that the loss in crop is mainly due to the shade cast by the trees.

These cumulative losses in agricultural production significantly affect the economics of eucalyptus in agroforestry. In the case of R~, the total return from wood production per acre is Rs. 7544 and if the cumulative loss in net return from crop production during the rotation is taken into account, the net return from wood production reduces to Rs. 5239 (7544--2305) or Rs. 655 per year per acre. In cases of R2 and R 3 the net return from wood production reduces to Rs. 5497 and Rs. 5602 or Rs. 610 and 560 per year per acre, respectively. It is apparent that, when the rotation is increased, the net return from wood production per year per acre decreases considerably.

These trends have been shown in Figure 1. It is evident that the trans- formation from R1 to R2 gives an annual gain of Rs. 55 per acre from wood but the loss in crop amounts to Rs. 100. Similarly, for the transformation from R~ to R3, a farmer will gain Rs. 107 per year per acre from wood but at the same time he will lose Rs. 202 per acre annually from the return on crop production. When the return from wood and the cumulative loss in crops are taken together, as shown in Figure 1 (b), the net return from wood production per year per acre decreases with increase in rotation.

It is obvious that, even for a short rotation period of 8 years, the loss in crop production is significantly high, but it is very high for rotations of 9 and

36

iooo

8oc

2 600

ZiO0 -

2oe

J (o.)

~ /kv RETURN FROM EUL. WOOD PER 'yEAR

/ PER ACRE

( b>

V~ A'V RETURN FRO~ EUC. ~ x ~/000 DISCOUNTING THE

- LOSS IN CROP

Av. LOSS IN CROP PER

~ YEAR PER ACRE WITH

. . " " - - tO Z CUMULATIVE / / / I N'rE REST

I I I 8 9 'to

. . . . . ABE IN YEARS . . . . .

Fig. 1. Comparison of returns from eucalyptus wood with the loss in agricultural crops.

10 years. If the rotation is reduced to 7 years, the average loss in crop production per year will come down to l0 percent, but this rotation will not give the large size wood of higher economic value and hence the net return from wood production after rotation will fall drastically to a meagre amount. Secondly, the basal area and diameter growth in eucalyptus slows down at 7 years and it is independent of stocking [6]. For high profitability a plantation should be harvested only after the growth slows down. In the light of above facts and the extent of crop loss, it can easily be inferred that for the regions of the Indo-Gangetic plains, an 8-year rotation of eucalyptus in agroforestry is the optimum rotation.

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Plate 1. Eucalyptus plantation along bunds of agricultural field with wheat crop.

B/C ratio and IRR

Benefit-cost ratio, the net present values, and internal rate of return of wood production have been calculated taking into account the loss in agricultural production. Table 3 shows that, at any interest rate, B/C and NPV decrease with the increase in rotation age. The IRR is 46.6% for R~, which is a significant interest rate. It decreases to 37.9% for R2 and decreases further to 30.9% in the case of R 3. Table 3 shows that these values of IRR from boundary plantations are comparable to those evaluated in the case of block plantations of eucalyptus for the same rotations [l]. From these data, it can

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Table 3. Comparison of B/C ratio and internal rate of return from eucalyptus plantation on bunds for three different rotations of trees taking account of the loss in net returns from agricultural production.

Rotation Nature of analysis Rate of interest IRR from IRR* from in years present block

10% 15% 20% study planting

8 NPV in Rs. 2478.50 1677.20 1124.60 46.6% 49.12% B/C Ratio 12.75 9.02 6.43

9 NPV in Rs. 2354.20 1466.60 855 .00 37.9% 29.2% B/C Ratio 12.15 8.01 5.27

10 NPV in Rs. 2166.50 1221.50 624 .30 30.9% 38.5% B/C Ratio 11.26 6.84 4.01

* IRR taken from reference 1.

readily be concluded that for the regions under study an 8-year rotation of eucalyptus in agroforestry is the optimum rotation for higher IRR with minimum loss to agricultural production.

Acknowledgement

The author is thankful to Sr Bhagwan Singh, Range Forest Officer, for his active cooperation in the collection of data from the fields.

References

1. Mathur R S, Sugar S R and Ansari M Y (1984) Ind For 110:97-109 2. Chaturvedi A N (1983) U.P. Forest Bulletin No 48:37 3. Gupta T (1979) Ind J For 2:118 4. Patel V J (1983) 'A New Strategy for High Density Agroforestry', Economic Intelligence

Unit, Centre for Monitoring Indian Economy, Bombay, India 5. Mathur R S, Sharma K K and Ansari M Y (1984) Ind For ll0:171-201 6. Chaturvedi A N (1986) Van Vigyan 24:1-3