The economic performance of four (agro-) forestry systems on alkaline soils in the state of Haryana in India

Abstract

This study evaluates and compares the economic performance of four (agro-) forestry plantations on alkaline soils in semi-arid conditions in the North Indian state of Haryana. The plantations were located in the villages of Gudha, Kohand, Nain and Sutana. The plantations varied with respect to the plantation management, the tree species and the use of intercrops. The economic performance is evaluated by calculating the net present values (NPVs) of the four (agro-) forestry systems. The NPVs are compared to the NPVs of the reference land use, i.e., the land use before the establishment of the (agro-) forestry plantations. The impact of soil regeneration via (agro-) forestry plantations on the NPVs is evaluated as well. Also the costs of production (COP) of three biomass applications (fuelwood, timber and charcoal) are calculated and compared to market prices to estimate the economic competitiveness of these commodities. The results show that the NPV ranges from − 196 to 1197 €/ha without subsidies and 318 to 1441 €/ha with subsidies. In most cases the NPVs of subsidized plantations are well above the NPVs of the reference land use. However, without subsidies only the NPV of the (agro-) forestry plantation in Gudha is higher than that of the reference land use. The highest NPV is observed in Gudha, which is due to the high economic value of the tree species Acacia nilotica and Eucalyptus teriticornis and the fodder crop Leptochloa fusca. In Nain and Sutana Prosopis juliflora trees were planted at a higher density compared to Gudha and Kohand, which resulted in a higher productivity, but also higher establishment and maintenance costs. The net result is a NPV lower than at Gudha. Furthermore, the study found that (agro-) forestry plantations can help regenerate alkaline soils for conventional rice and wheat production. Soil regeneration can increase the NPV strongly but the actual increase depends on the method used to quantify the value of soil regeneration. The results also indicate that the production of fuelwood and charcoal from wood from (agro-) forestry plantations on alkaline soils is competitive with existing production chains. For timber the results are mixed. The results of this study show the need and benefits of optimizing the economic performance of (agro-) forestry plantations as part of current and future policies by, for example, subsidizing (parts of the) establishment costs and creating a mechanism by which soil regeneration is rewarded.