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The environment ministry has proposed to offer wasteland available with it to investors through multi-stakeholder partnership.
The move, which has been keenly promoted by the paper industry but opposed by environment groups, will, according to the ministry, help it increase the country's forest cover to 33 per cent from the present 23 per cent at no cost.
A Cabinet note to this effect had been sent for approval and was expected in a few weeks, environment ministry secretary Prodipto Ghosh said on Wednesday.
The ministry needed an investment of Rs 60,000 crore (Rs 600 billion) to meet the target of extending the forest cover to 33 per cent, sources said. The private investment is expected to meet this need.
The scheme is expected principally to benefit the Rs 20,000 crore (Rs 200 billion) paper industry, which has been dependent on contract farming to get the timber for manufacturing paper.
The ministry officials said the policy prepared by the ministry provided for leasing out of the land through a tripartite agreement between the local community, the private investor and the state forest department. The government policy was looking at land the size of Maharashtra, Ghosh said.
The country today has a forest cover of 77 million hectares and about 33 million hectares of wasteland, which is likely to be targeted under the scheme.
While the Centre for Science and Environment maintained that the move was anything but beneficial for the community or for forests, Indian paper Manufacturers' Association President Pradeep Dhobale said the approval of the policy would be a tremendous boost for the paper industry, which depends on trees for 35 per cent of its produce.
He defended the proposal saying the ministry was planning to give only up to 50 hectares of land at a time and hence there was no chance of any misuse.
This raw material is from 200,00 hectares of land where contract farming is done whereas it would need 1.2 million hectares to be self sufficient.
We are now importing or using residue from agriculture and recycled paper, Dhobale said. If we get some part of the environment ministry's 33 million hectares of waste land, we could easily grow trees there and use it for paper, he said.
However, NGOs are not convinced. Why not have farm forestry instead of giving government land to investors, said Richard Mahapatra, speaking on behalf of the Centre for Science and Environment. It was just a way to get land cheap and the land could instead be given to the landless, he said.
What was the use of having forest cover if it did not benefit the people, he asked. An experiment was carried out in Andhra Pradesh with Reliance and the community but it did not succeed, Mahapatra said.
The paper industry, however, points at the rising demand for paper, amid increasing input costs, especially pulp, to justify the need. International pulp prices have jumped by about 7 per cent last year from $560 a tonne to $600 now, driving companies to hike paper prices by an average of Rs 2,500 a tonne.
The paper manufacturers in the country use three kinds of raw materials for production - forest produce (wood and bamboo), agro-based (bagasse, straw, etc) and recycled (waste) paper. Wood is the scarcest of these.
With the country's gross domestic product growing at about 8 per cent, the paper industry is also seeing similar growth. According to industry estimates, domestic paper consumption is set to touch 10 million tonnes by 2010 from the current 7.2 million tonnes.
