India’s Agroforestry Ambitions & Financing and Policy Hurdles

Syllabus: GS3/Environment

Context

  • Recently, the experts highlighted that India’s agroforestry continues to face serious challenges, especially in access to finance, policy implementation, and farmer awareness, during the first South Asian Agroforestry & Trees Outside Forests (AF-TOF) Congress.

South Asian Agroforestry & Trees Outside Forests (AF-TOF) Congress

  • It is referred to as the ‘Treescapes’ 2026 Congress.
  • It marked the first regional platform dedicated to advancing agroforestry and Trees Outside Forests (TOF) across South Asia.
  • It was organised by the Centre for International Forestry Research and World Agroforestry (CIFOR-ICRAF) in collaboration with the Indian Council of Agricultural Research (ICAR).

About Agroforestry

  • It is a land-use system that integrates trees with crops and/or livestock on the same land.
  • It enhances food security, soil health, biodiversity, carbon sequestration, and income diversification for farmers by combining perennial trees with farming systems.
  • It helps in addressing land degradation and climate risks.

Current Status & Future Projection

  • India currently has about 28 million hectares under agroforestry, and the government aims to expand this to 50 million hectares by 2050.
  • Tree-based systems account for nearly 20% of India’s national carbon stocks.

Related Issues & Concerns

  • Limited Access to Finance: Of nearly ₹20 lakh crore in annual institutional agricultural credit, less than 5% reaches agroforestry. Reasons include:
    • Long gestation periods (5–30 years);
    • Tenure and land ownership complexities;
    • Lack of acceptable collateral;
  • Policy Awareness Gaps: Low awareness among farmers about the National Agroforestry Policy, 2014, especially regarding:
    • Tree harvesting rights;
    • Transit and regulatory clearances;
  • Weak Policy Implementation: Although agroforestry is recognised as climate- and livelihood-friendly, it remains under-supported by institutions and financing mechanisms, limiting scale and impact.
  • Missed Economic Opportunities: India imports over $7 billion worth of wood annually, indicating underutilised domestic potential, lost opportunity for farmers and the green economy, despite strong domestic tree resources.

Efforts For Agroforestry in India

  • National Agroforestry Policy, 2014: First-of-its-kind policy globally to promote tree-based farming.
  • ICAR-led research and regional studies: Evidence shows agroforestry helps reduce deforestation and avoid tens of millions of tonnes of GHG emissions annually.
  • AF-TOF/Treescapes Congress: Regional platform involving policymakers, researchers, financial institutions, industry, farmers, and youth to strengthen governance and investment frameworks.

Way Forward

  • Improve Institutional Credit Flow through tailored financial products for long-gestation tree systems.
  • Simplify Regulations on tree harvesting and transit, with clear, farmer-friendly guidelines.
  • Enhance Awareness of agroforestry policies at the grassroots level.
  • Leverage Carbon Markets and Digital Tools: Align carbon credits, digital traceability, and private-sector procurement with smallholder realities.
  • Reduce Import Dependence: Promote domestic timber and tree-based value chains to strengthen rural incomes, especially for India’s 86% marginal farmers.
  • Align Climate, Agriculture, & Trade Policies to unlock agroforestry’s potential for income generation, climate mitigation, and ecosystem services.

Source: DTE

 

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