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I Rural Economy I Model Bankable Projects
 
 Minor Irrigation  
 Land Development  
 Plantation / Horticulture  
 Agricultural Engineering  
 Forestry / WasteLand  
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 Animal Husbandry  
 Medicinal & Aromatic  Plants  
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Model Bankable Projects

   
   
 

Forestry Wasteland

 
Subabul
 

Introduction

Farm forestry can be one of the best means for afforestation of wastelands especially in areas with no assured irrigation which will in turn provide  raw material to industries. NABARD, as an apex institution with regard to policy, planning and operation in the field of agriculture and rural credit, is actively involved in extending credit support for development of rural areas along with other financial institutions. Development of wastelands through pulpwood plantations is identified as a thrust area for which NABARD is extending 100% refinance to banks at concessional rate of interest.

The National Forest Policy, specifically encourages Company-farmer Partnerships and states :

“As far as possible, a forest based industry should raise the raw material needed for meeting its own requirements, preferably by establishment of direct relationship between the factory and the individuals who can grow the material ………… the practice of supply of forest produce to industry at concessional prices should cease” (GOI, 1988).

Distribution

Common Names: Subabul, Leucaena & ipil-ipil, etc.

Subabul is a popular farm forestry tree in the coastal areas of Andhra Pradesh. It is estimated that in Prakasam district of Andhra Pradesh alone, Subabul is planted in area exceeding 50,000 ha.

 

It is one of the fast growing hardy evergreen species. It is a vigorous coppicer and responds well to pollarding, lopping & pruning. It has deep and strong taproot and even the seedlings are deep rooted. There are four types of subabul viz,
Hawaiian type: The plants are short bushy and remarkably drought tolerant. It is suited to hilly terrains in drought prone areas. It is a prolific seed producer and is good for fodder purpose.
Salvador type: Tall, tree like and fast growing having maximum annual biomass production. Possesses large leaves, pods and seeds than Hawaiian types. Responds to high fertilization.
Peru: Tall and extensively branching type and is ideal for fodder purpose.
Cunningham: It is a cross between Salvador and Peru types.

Ecology

Subabul is best suited for warm regions and grows well between 22 and 30ºC in regions of 500 to 2000 mm annual rainfall. Because of its strong and deep root system, the tree is highly drought resistant. It is restricted to elevations below 500 m but withstands variations in rainfall, sunlight, windstorm, slight frost and drought.

Soil

It cannot withstand water logging. It requires deep well drained neutral soil and can tolerate saline and acid soil. It can also be grown in steep slopes, hilly terrains, gravelly areas and sandy loams. It can grow under a wide range of conditions as a range plant, roadside plant, in pastures, etc. The land should, however, be cleared of bushes, ploughed and levelled before sowing.

Performance on different type of Wastelands

 The tree grows very well under alkaline soils and also performs under dry clayey soils. The growth is average under sandy, acidic & dry gravel soils. The performance is poor under marshy, usar lands & in high altitudes.

 

Botanical features

The leaves are bipinnate, 15 to 20 cm long with 10 to 15 pairs of pinnate leaves. Inflorescence is globular and the flowers are white.

Commercial Uses:

Subabul wood can be used for light construction, poles, props, pulp, furniture, flooring and fuel wood. Subabul wood is an excellent fuel wood with a specific gravity of 0.45-0.55 and a high heating value of 4000 kcal/kg. Subabul forage has a high protein and carotene content and pellets or cubes are internationally marketed as animal feed. 

Silviculture / Cultivation practices

Planting of seedlings can be done with the onset of rains in May-June or Sept-October. Seed viability is high, but the hard seed coat posses dormancy. To hasten germination seeds are to be dipped in concentrated sulfuric acid for four minutes and then washed or put in hot water at 80ºC for four minutes. The seeds should be sundried afterwards for about one hour before sowing.

A seed rate of 3-4 kg/ha is recommended. Sowing is preferably done during February-March in a nursery or in polythene bags or in situ at 2-3 cm depth. Seedlings (1.5 to 3 months old with 6-8 leaves) are planted in the main field. A spacing of 1 x 0.1 m is recommended for a pure crop of fodder, 1.5 x 0.2 m for planting in boundaries and borders of coconut gardens and 2 x 0.2 m when raised along boundaries.

Planting Material

Methods of propagation for raising plantation are : (i) Direct sowing of seeds; (ii) Bag Plantation; (iii) Naked seedlings collected from existing plantation regeneration.

Spacing adopted

The most common spacing adopted are 1.27m x 1.27m (50” x 50”) (i.e. 6200 plants/ha);  2m x 2m (2500 Pl/ha);  3 x 1.5m  (2222 plants/ha). However, the recommended spacing is 1.5m x 1.5m (4445 Pl/ha). Inter cultivation may not be possible from second year onwards.

Weeding / Soil working

Two weedings / soil working are required per year for the first 3 years of sowing / planting.

Pests and diseases

Subabul generally has been free of serious insect & diseases, but is susceptible to jumping plant lice (psyllids) which have caused serious defoliation and mortality in some areas. Some varieties are susceptible to gummosis, which is most likely caused by Fusarium or Phytophtora species. Leaf spot fungus also can cause defoliation under wet conditions.

Unit Cost

The cost of cultivation of Subabul in one hectare at an espacement of 1.5mx1.5m i.e. 4445 Subabul plants per ha has been worked out at Rs. 29489/- per ha.  The details of various items of expenditure are viz., land preparation, digging of pits, plant and material, manure and fertilizer, plant protection, etc.  The unit cost break up of the Subabul plantation is shown in Annexure-I.

Yield & Rotation

Harvesting is generally done at the end of third year or fourth year. The average yield is 70-75 ton/ha. Farmers adopt a rotation of  3-4 yrs. Normally they go for 3 coppice crops. During second rotation, only 2 coppice shoots are  retained in each stem. The sale price for pulpwood is about Rs. 860/ton.

The material in higher girth class is being purchased by slate manufacturers at a rate of about Rs. 1200/- to Rs. 1500/ton. The stumps removed from plantations after three rotations may fetch a rate of Rs. 350/- to Rs. 400/-ton for usage as fuel wood for tobacco barns.

Economics

The financial analysis with the above parameters of the investment cost & yields, the BCR & IRR works out to 2.54 & 49.97% respectively. The detailed economics has been worked out & is shown in Annexure - II.

Markets & Marketing Arrangements

There is enormous demand for Subabul wood for pulp (raw material) from many paper industries.

Repayment of Loan

Three years moratorium can be considered while fixing the repayment period.  The principal and interest can be repaid in 4 years from planting as given in Annexure - III. 

Beneficiaries Contribution / Margin Money / Down Payment

The beneficiaries may contribute towards down payment ranging from 5 to 25% depending upon their category, i.e., small and other farmers. Beneficiary’s own labour can also be taken as his contribution towards the margin money requirement.

Quantum of Refinance

The loans extended by the banks to individual farmers and / or groups of individuals such as co-operatives under Wasteland development projects are eligible for refinance from NABARD up to 100%.

Rate of Interest

The rate of interest on refinance from NABARD will be as per the circulars issued by NABARD from time to time.  The rate of interest to be charged to the ultimate borrowers would be decided by the financing banks. However for working out the financial viability and bankability of the model project we have assumed the rate of interest as 12%.

Annexure-1

COST OF SUBABUL (LEUCAENA LEUCOCEPHALA) CULTIVATION IN ONE HECTARE OF LAND                                                          

ESPACEMENT: 1.5 M x 1.5 M                                                              AVG. WAGE RATE:Rs.50/MD      

NO.OF TREES/HA.:4445                                                                      CASUALTY REPLACEMENT:20 %            

SURVIVAL/HA.:3555 Nos.  

 

S.No.

 PARTICULARS OF WORKS

 UNIT

 COST ( Rs.) PER YEAR

 

 

 

 

 

 

1

2

3

 TOTAL (RS.)

1

Site preparation

 10 MD

500

 500

2

Initial ploughing for 6 hrs

 Rs.100/hr

600

 600

3

Alignment & staking

 5MD

250

 250

4

Digging of pits (30 cm3 ),@ 50 Pits/MD and Refilling of pits @ 150 pits/MD

119 MD & 24 MD

 5950

 1200

 

 7150

5

Cost of FYM @3 Kg/pit

 Rs.200/ton

2667

 2667

6

Cost of fertiliser @50gm/plant

 Rs.9/Kg

2000

2000

2000

 6000

7

Cost of plants including transport(4445, 890 nos.)

 Re.0.5 per plant

 2223

445

 2668.5

8

Planting & replanting @100 plants per MD.

 25 & 5MD

 1250

 250

 1500

9

Weeding cum soil working, application of fertiliser etc.(2,2,2)

 20 MD per working

2000

2000

2000

 6000

10

Plant protection measures.

 LS

250

250

250

 750

11

SUB TOTAL

RS.

17690

6145

4250

28085

12

 CONTINGENCY 5 %

 RS.

 884

 307

 213

 1404

 

GRAND TOTAL

RS.

18574

6452

4463

29489

 
YIELD & INCOME OF SUBABUL PLANTATION IN ONE HECTARE

YEAR

YIELD (TON)

RATE (RS / TON)

TOTAL INCOME (RS)

I ROTATION – 4th YEAR

Pulpwood - 80 Tons

800

64000

Fuel wood – 20 tons

400

8000

II ROTATION – 8th YEAR

Pulpwood - 70 Tons

800

56000

Fuel wood – 10 tons

400

4000

 

Annexure-2

Economics of Subabul plantation in 1  hectare

Years

1

2

3

4

5

6

7

8

Cost

18574

6452

4463

 

 

 

 

 

Benefits

0

0

0

72000

0

0

0

60000

Net Benefit

-18574

-6452

-4463

72000

0

0

0

60000

PWC@ 15%   23964.28

PWB@ 15%    60780.34

BCR    2.54

IRR      49.97%

Annexure-3

Repayment Schedule

Year

Loan disbursed

Principal Outstanding

Interest

 Income

Repayment

 

 

 

12%

 

 Principal

 Interest

1

 18574

 18574

 2229

----

---

2229

2

 6452

 25026

 3003

----

---

3003

3

 4463

 29489

 3539

----

---

3539

4

 

 29489

 3539

72000

29489

3539

 
 
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