The Hindu Business Line : JK Paper ties up with UN to sell carbon credit of farmers

Farmers in six districts of Andhra Pradesh and Orissa would be able to receive money in the form of carbon credit through the LULUCF (land use land use change in forestry) programme of the United Nations.

Claiming to be the first project of its kind in the country, domestic paper manufacturer JK Paper has tied up with the UN to sell carbon credits of farmers. The valuation is estimated in terms of carbon dioxide absorption by the plants over a period of five to seven years.

The farmers would undertake plantation of eucalyptus trees in their lands in Raygada, Kalahandi and Koraput districts of Orissa. In Andhra Pradesh, farmers will set up cajurina plantations in their unused and shallow lands in the districts of Srikakulam, Vijayanagaram and Vishakapatnam.

First phase

According to the Managing Director of JK Paper, Mr Harsh Pati Singhania, in the first phase, 2,800 farmers would be involved in the project and plantation would be carried out over a total area of 3,500 hectares spread over the districts.

The plan that has been cleared by the UN is to plant 2,500 seedlings per hectare. “We started initial work in 2003 and it involved huge paper work and several spot visits by UN officials. Finally, farmers have started planting the trees this year,” he said.

“These plants will grow in five to seven years after which the company itself will buy them back from the farmers, since wood is the main raw material for our paper industry. The estimated cost of these trees, at present valuation is around Rs 35 crore, which the farmers will receive from our company,” Mr Singhania said.

Carbon credit

On the other side, the estimated value of the carbon dioxide that would be absorbed by the plants during these years would fetch them another Rs 4 crore. The average land size of the farmers participating in this project is approximately 1.2 hectare, which would fetch them around Rs 14,200 in terms of carbon credit.

The farmers would be paid by the World Bank from its Bio Carbon Fund, specially set to deal with carbon trading.

The coordination would be done by a local non-government organisation, Vedamacs, which would provide the training, while the cost would be borne by the company. Funds would be distributed to the farmers through an escrow account jointly operated by the company and the NGO, Mr Singhania said.

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