The Indian Economy Overview

The World Bank and India

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The World Bank and Forestry

Among the most controversial forestry projects financed by the World Bank are the so-called "social forestry" projects in India. In recent years, the World Bank has financed seven social forestry projects in India amounting to a total of $345 million in IDA credits.

Social forestry was originally conceived by the Indian government as a response to the forestry crisis and to accelerating deforestation in India. Recent estimates are as high as 1.5 million hectares per year. The original objectives of social forestry projects including those financed by the World Bank were to assist rural communities and landless people to meet their needs for fodder, fuel wood, small timber, fruits, and minor forest produce through community-planned and managed tree plantations and nurseries.

Neither Social Nor Forestry

However, most social forestry projects have come under increasing criticism because they have failed to adequately involve the local communities and rural poor, who are supposedly the main beneficiaries. Instead, these projects have catered to urban and commercial interests through the widespread promotion of fast growing tree species for pulp and paper manufacture, rayon production, urban fuel wood supply and other commercial uses. Private farmlands, wastelands and community lands have been converted for these uses, and in a number of cases the access of poorer rural populations to fodder, fuel wood and other forest products has actually been reduced. The widespread planting of eucalyptus in ecologically inappropriate arid areas has boomeranged with degradation of soils and water tables.

In 1984, the World Bank approved the India National Social Forestry project for $165 million for the four Indian States of Gujarat, Himachal Pradesh, Rajasthan and Uttar Pradesh. It was co-financed by the US Agency for International Development (AID) and had four objectives:

  1. To increase production of fuel wood, small timber, poles and fodder.
  2. To increase rural employment, farmer's incomes and opportunities for participation by landless people.
  3. To reforest degraded areas, wastelands, and reduce soil erosion.
  4. To strengthen forestry institutions.

A 1988 midterm review conducted by US AID discovered objectives, non-fulfilment of several shortcomings environmental and social counts. The USAID review found emphasis on the promotion of fast-growing tree species such as eucalyptus on privately owned large farms and wastelands to provide wood products to paper and pulp industries and commercial institutions.

It documented inability that eucalyptus was inappropriate in meeting the project's objectives because of its lack of fodder value and ineffectiveness in soil building. Besides its inappropriate use as a monocrop in semi-arid areas where competition for water and the need for soil enhancing treatments are high. The review also noted that the project was not meeting the subsistence needs of the local people, and therefore was ineffective in reducing pressure on existing forest lands.

It cited the lack of participation of local communities in project design and implementation, and over reliance on industry-biased State forestry departments as the main causes of the project's shortcomings.

In Karnataka, an IDA forestry credit of $27 million starting in 1983 primarily promoted eucalyptus on private farmlands, village common lands and wastelands. These plantations had very little involvement of the rural community access to landless. In some cases, rural community access to fuel wood and fodder actually decreased because of poor and landless were not permitted on common lands after the state forestry department grew eucalyptus plantations on these lands. In many instances, the eucalyptus plantations produced perverse social impact. They were planted in ecologically inappropriate areas, causing depletion of water tables and exhausting soil fertility in arid areas. In Karnataka, small farmers and rural poor were driven to protesting industry biased eucalyptus plantations, including civil disobedience involving the uprooting of eucalyptus seedlings on village common lands.

Bank's Project in Bastar

In Bastar region of Madhya Pradesh, the WB's first project for 'forest development' became a major cause for deforestation in the region. The Madhya Pradesh Forestry Technical Assistance Project. It was primarily developing for plantations for the pulp and paper industry.

The World Bank project in Bastar was part of the trend to convert natural forests to commercial plantations so that the biomass produced could no longer benefit the original dwellers. The tribal sustenance base in cane and bamboo for basket weaving, mangoes, tamarind, jackfruit, mahua and edible berries are all destroyed when natural forests are replaced by monoculture plantations of eucalyptus or tropical pine. The Bastar Tropical Pine Project was planned at a cost of Rs 96 lakhs to convert 8,000 ha of natural forests in Bastar hills to pine plantations to feed the paper and pulp industry. It was finally shelved due to the serious resistance of local tribals. It was based not on scientific knowledge but on ecological ignorance of the forest ecosystem and tribals integration. It was a prescription for destruction of tropical forests aimed at changing the forest character in such a manner that they exclusively serve commercial interests, not the indigenous peoples.

In Karnataka, small farmers and rural poor were driven to protesting industry biased eucalyptus plan-tations, including civil disobedience involving the uprooting of eucalyptus seedlings on village common lands.

The commerce-lisation of forests is the primary cause of large-scale and rapid deforestation. The forest dwellers are the victims, not the agents of deforestation—in Bastar in Central India, in Andaman and Nicobar Islands, in the North East and in the Himalayas.

It is not just the Bank's forestry projects which have destroyed tropical forests, but also its sponsoring Narmada-Sardar Sarovar Dam project, besides mining and energy generation projects at Singrauli in Central India.

Ethopia : Making of a Famine
Referring to the degradation of the Ethiopian Highlands, the World Resource Institute Report states: "The Central Highlands Plateau in Ethiopia supports 22 million farmers (70% of the population) and contains 59% of the country's cultivate land. Exhaustive farming practices, overgrazing, and fuel wood collection have severely eroded the plateau and destroyed most of the forests. Loss of soil fertility is widespread and the use of fertilizer is so limited that food production has not kept pace with population growth. Drought has precipitated a major famine."

What the WRI report fails to mention is that it is profits, not people, that are ultimately responsible for the degradation of the Ethiopian highlands, Under the Third Five Year Plan (1968-73), Ethiopia spent only 1% of the total expenditures on peasant agriculture and instead emphasized the rapid development of large-scale commercial farms producing crops for export. Tractors, pesticides, fertilizers were exempted from import duty. Multinationals making agrarian investments of $200,000 or more were given a 3 to 5 year income tax holiday. Commercial development of the Awash Valley was part of the plan. By 1970, 60% of the land brought under cultivation in the Awash Valley had been devoted to cotton production, while sugar plantations claimed another 22% of the cultivated area. To make way for these multinational managed commercial firms, the government had forcibly evicted Afar pastoralists from their traditional low-land pastures. The Afars were thus pushed into the fragile uplands which were rapidly overgrazed and degraded. The degradation of the Ethiopian highlands needs to be viewed in this context of the introduction of commercial export agriculture in the low lands, and the consequent displacement of nomads and peasants. It is not local ignorance but global control and exploitation of land and forests that is catalyzing the tropical forest's disappearing crisis.

For further details contact:PIRG (Public Interest Research Group) 142, Maitri Apt, Plot No 28, Indraprastha Ext. Delhi 110092. India. Ph: 2432054 Fax: 2224233 email:

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