multipurpose tree species research for small farms: strategies ... - part

subsidizes poor farmers. The government National Social Forestry Project, India
would not add additional subsidies to this
project except for the animal exchange
program. No cost recovery was planned. The
only requirement was that the beneficiaries
would undertake the maintenance of the
irrigation works. Loans for horticulture
development and soil conservation would be
through the normal government channels,
Ect ,omic analysis. The overall project
EIRR has been estimatey at 23%, with forestry
at 24%, extension at 100 %, horticulture at
35%, and irrigatioi at 64%. The EIRR would
be equal to 12%, the opportunity cost of capital,
if the benefit were reduced by 47% or 'he cost
increased by 87%.
Karnataka Social Forestry Project, India
Benefit sharing. Fifty percent of the
products from the government land would go to
the panchayat and the rest to the State;
paroduction from the rehabilitated governmen:
and would be shared at the rate of30% lo the
small-scale, landless and poor farmers with 70%
to the State; 20% of the production from strip
plantings would be given to the people who
maintain and protect the trees free of cost, and
the remaining 80% would go to the State; the
entire bamboo crop would be given to the tribal
cooperati'e; and al the prunings, fruits, and
residues from all the plantings would be
available free for the poor.
Cost recovery. The costs of establishing the
plantations would be recovered from the sale of
the products after the people received their
respective share. Sedling costs would be
charged only if people wanted more than the
750 seedling ceiling per household. The rest of
the costs would be recovered from indirect
project benefits.
Financial and economic analysis, The FIRR
was estimatcd at 201% while the EIRR is 22%.
Planting bamboo, and along rese~rvoir shores
and roadsides would have negative rates of
return as these have been designed to benefit
the poor with little expected direct return, is the
bamboo would be cxclusively for the tribal
population, and the reservoir and roadside
plantings would be for soil protection and
aesthetic values. These components only
constitute 3% of the project cost and involve
less than 5% of the total project area. The
project would not be sensitive to normal cost
and benefit changes.
72
Cost recovery. The return to the forest
departments is low financially but the project is
oriented towards meeting daily forest needs for
the villagers and rehabilitating degraded land.
The FIRR for the forest departments were
either zero or negative in about half of the
components. Forest departments in Rajasthan
and H,,nachal Pradesh do not intend to recover
the costs. In the remaining models, forest
departments recoup from. 100-200% of their
initial cost in ',nominal ierms. The net present
values at a 12% disc.ount rate are generally
negative, imrly;ig a subsidy by the government
over time.
With the lower return from the investment
the model mix has been designed to reduce loss,
ie. more lower investment cost components
(farm forestry), more higher return components
(fewer strip, more waste land plantations), more
direct distribution of benefits, and components
where forest departments would recover the
direct costs of investment in nominal terms.
Economic analysis. EIRR for the project is
estimated at 27% (Uttar Pradesh 25%, Gujarat
26%, Rajasthan 17% and Himachal Pradesh
34%). The rate is not sensitive to changes in
costs or benefits. At 12% the switching value
would be a 67% reduction in benefits and a
201% increase in costs.
The FIRR is estimated to be from 11% to 35%
for most components except for strip plantings
on government waste lands in Gujarat and
Rajasthan (4-8%). This is the result of the high
cost of establishment incurred by the
government and the exemption of part of the
plantation from harvesting for environmental
reasons.
Community Forestry Development and
Training Project, Nepal
Cost recovery is not proposed as the people
in the project area are very poor.
Economic analysis. The EIRR is estimated
at 16% at a 12% interest rate, the switching
value for yield is -33% and for costs, 116 to
301%.
Second Forestry Project, Nepal
Cost recovery is not proposed for this project.
Economic analysis. Over the 40 year life of