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Study on Economic Benefits from Eucalyptus Plantations to the Local

Communities of District Malakand, Khyber Pakhtunkhwa Province, Pakistan

Conference Paper · June 2022

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 Forest 2021

E-proceedings
Symposium on
Multi-Stakeholders’ Engagement
in Forest/Protected Area Governance
for Conservation and Livelihoods
23rd – 27th August 2021
ONLINE

Funded by the
Run by
European Union
www.myforestwatch.com.my
 Session 4

Community-based forest/protected
areas management and livelihoods
improvement
Session 4.1: Study on Economic Benefits from Eucalyptus Plantations to the Local Communities of
District Malakand, Khyber Pakhtunkhwa Province, Pakistan

Author: Pervez Manan

National REDD+ Office, Ministry of Climate Change, Pakistan

Presenter Profile

Pervez Manan has a diverse and wide range of demonstrated experience of over 13 years working
with Government and international organisations in the fields of forestry and environment, including
in Climate Change Mitigation & Adaptation, REDD+, Disaster Risk Reduction, Gender, and Social
Protection into multidimensional development initiatives of poverty alleviation and sustainable
livelihoods. He also remained part of the planning and implementing team of the historic project of
the provincial government of Khyber Pakhtunkhwa, Pakistan, titled ‘Billion Tree Afforestation Project’,
and is presently engaged as National Forest Inventory Expert in Pakistan’s REDD+ Readiness
Preparation Project.

Abstract

Eucalyptus is the most widely propagated tree species throughout the world due to its adaptability to
site, ease of management, multipurpose uses and fast growth rate. Eucalyptus trees were first
introduced in the Indian Sub-Continent as early as 1790. In District Malakand, Eucalyptus mass
plantations were first carried out under the Malakand-Dir Social Forestry Project in the early 1980s.
This study has been conducted in 56 plantation sites of district Malakand to assess the financial
benefits from eucalyptus plantations. The study found eucalyptus as a main income-generating cash
crop for the local communities and which has changed the nonproductive barren areas into the most
productive green resource. The study also shows that areas where the communities were well
organized were more productive as compare to areas where the communities were disintegrated. The
study also reveals that the middleman or the contractors were grabbing the man part of income as
the communities were getting much less as compare to market. The study recommends organization
and reorganization of the local communities and their capacity building on marketing and value chain
management of eucalyptus to enhance productivity from these plantations. The study also
recommends establishment of composite wood and paper industry in Malakand as plenty of raw
material is available in the shape of eucalyptus.

Symposium on Multi-Stakeholders’ Engagement in Forest/Protected Area Governance for Conservation and Livelihoods 227
Background

Eucalyptus is the most widely propagated tree species throughout the world due to its adaptability to
the site, types of management systems, multipurpose uses and fast-growing nature (Zacharin, 1978).
Eucalyptus trees were first introduced in Indian Sub-Continent as early as 1790 (Srivastava et al.,
1997). Eucalyptus was given immense importance in large-scale afforestation especially in social
forestry, watershed management, Irrigated plantations, and agroforestry programs throughout
Pakistan during the seventies and early eighties of the 20th century (Tanvir, 2003). Eucalyptus has been
tried up to 2200 m altitude with an annual rainfall range of 400- 4000 mm, it can grow in a wide variety
of soil conditions but requires deep, fertile, well-drained loamy soil with adequate moisture for best
growth (Srivastava et al., 1997).

In District Malakand, Eucalyptus mass plantations were first carried out under the Malakand-
Dir Social Forestry Project in the early 80s (DFO Malakand Office record) and since then it is the choice
of the communities due to its frequent returns. But no proper documentation or research exist on the
economic benefits to the communities from eucalyptus plantations, that is why this study was
conducted to ascertain the value of financial benefits from eucalyptus plantations to the local
communities of district Malakand.

Materials and methods

Description of Study area

Malakand is a district of Khyber Pakhtunkhwa province of Pakistan Located at 34 29’ 59.99” N 71 44’
59.99” E. It is bounded by River Swat on the North and West, on the North Reiver Swat separate it
from Lower Dir District whereas, on West separate it from Bajaur and Mohmand Tribal districts. On
the East to Malakand lies District Buner, on the South-East District Mardan, South-West Charsadda
districts. The total area of Malakand District is 952 square K.M having a population of 720295 persons
with 91414 Households (2017 Census report). District Malakand is constituted of two subdivisions i.e.,
Swat Ranizai (Batkhela) and Sam Ranizai (Dargai). According to Govt. of Khyber Pakhtunkhwa Forest
Department 15.90% of area of Malakand is under forests, 0.92% shrub and bushes, 29.31%
rangelands, 40.87% agriculture land, 2.18% river beds, 0.15% water bodies, 0.09% canals, and 7.67%
barren lands.

228 Symposium on Multi-Stakeholders’ Engagement in Forest/Protected Area Governance for Conservation and Livelihoods
 Figure 1: Location Map of District Malakand Figure2: Land Cover Map of District Malakand

Methods

Review of relevant record of the office of the Divisional Forest Officer (DFO) Malakand Forest Division
was carried out to obtain information about extent of the eucalyptus plantations, years of planting,
cost, and labor engaged in planting. Record about registration of Village Organizations (VOs), their
subsequent renewals and progress reports submitted to DFO office was also reviewed. In order to
have more accurate and precise results, 56 plantation sites raised on communal lands throughout the
district were selected based on the availability of sale and harvesting records and compactness of the
plantations.

Focused group discussions were held with the members of VOs where the communities were
organized, their available record regarding meetings, sale of the plantations etc. was also reviewed
and information about pre plantation condition and benefits, years of harvesting, generated monitory
benefits etc. were gathered. A total of 6 focused group discussions were held with the president and
general secretaries of 37 VOs, one session consisted of representative from 7 VOs, while the rest 5
sessions consisted of representatives from 6 VOs. For the plantation sites where no VOs were exiting
key informants who were well acquainted were identified with the help of local forest department
officials and were interviewed to gather information about years of pre plantation condition and
benefits, harvesting, generated monitory benefits etc. A total of 19 key informants were interviewed.

Symposium on Multi-Stakeholders’ Engagement in Forest/Protected Area Governance for Conservation and Livelihoods 229
 Based on the record of DFO Malakand and VOs, the status of village organizations was ranked
as strong, moderate and non-existing based on the criteria as follows:

Strong VO: Registered with forest department and renew its registration timely, have proper office
bearers, actively meet, share their progress reports and minutes of the meeting with forest
department, maintained proper record, and participate actively in forest department
activities.

Moderate VO: Registered with forest department and renew its registration timely, have proper office
bearers, occasionally meet, occasionally share their progress reports and minutes of the meeting with
forest department, and occasionally participate in forest department activities.

Non-existing VO: One time registered with forest department but then defunct or never registered
with forest department, do not have any proper office bearers and records.

Also, a meeting was convened at DFO Malakand Office with wood contractors to obtain
information about per acre yield of eucalyptus, there profit margin, sale markets, and uses. For rate
determination and sale procedures a local market survey was also conducted.

Data was grouped on the basis of status of VOs into three groups i.e., Strong VOs, Moderate
VOs and Non-existing VOs. Each group was further subcategorized on the basis of same year of
planting and same year of harvesting i.e., All the plantations in each group planted in 2000 and
harvested in year 2008, planted in 2002 and harvested in 2010, planted 2003 and harvested in 2016,
and planted in 2006 and harvested in 2018 were sub grouped respectively. For comparison of
productivity data of sub group of each group of the same years were compared. Impacts of VOs on
productivity were assessed on the basis of monetary returns from the plantations.

For comparison of returns to the communities from harvesting and its market value data of
those plantations which were harvested in 2018 were used, as market rates of earlier years were not
available.

Results

During focused group discussions and key informant interviews all of the participants/ respondents
were of the unanimous view that before plantations most of these areas were either completely
barren or having scattered grass patches presenting hideous look. Moreover, soil erosion, land sliding
and flooding were common in rainy seasons. The local communities were not getting any financial
benefits from these sites before plantation, except for free grazing. Even for firewood the inhabitants
were dependent on other areas. The participants/respondents expressed that after plantations the
sites were restored to lush green forests abundant in grasses and fodder, whereas, erosion and flood
hazards considerably decreased, grasses production and other fodders increased. The overall
environments of the sites have been rehabilitated remarkably. Their firewood needs were also fulfilled
and were no more dependent on other areas. The firewood that is used for household consumption
was not monetized but the respondents/ participants considered that it has significant impact on local
economy.

According to the official record of Divisional Forest Officer (DFO) Malakand total of Pakistani
Rupees (PKR) 79366365 were spent in raising 19854 acres eucalyptus plantations on 56 sites with an

230 Symposium on Multi-Stakeholders’ Engagement in Forest/Protected Area Governance for Conservation and Livelihoods
average cost of PKR 3998 per acre, out of which PKR 4318245 were incurred on procurement of plants,
an amount of PKR 45028872 spent on planting, and an amount of PKR 30019248 on maintenance and
watch and ward of these sites (Table 1).

Table 1: Expenditures

Status of No. of Extent of Cost of Planting Maintenanc Total Cost per

VOs Sites Area plants Cost e Cost Expenditure Acre
s
(Ac) (PKR) (PKR) (PKR) (PKR)
(PKR)

Non- 19 6156 1338930 13961808 9307872 24608610 3998

existing

Moderat 25 8927 1941623 20246436 13497624 35685683 3998

e

Strong 12 4771 1037693 10820628 7213752 19072073 3998

Total 56 19854 4318245 45028872 30019248 79366365 3998

The official record of DFO Malakand office revealed that 3650 local labour were engaged in
the planting and maintenance of these plantations. According to the available record of VDCs and
statements of key informants an amount of PKR 267145000 has been generated as return from these
plantations with an average return of PKR 13455 per acre, where an amount of PKR 242020000 was
received by the communities as sale proceed from the harvesting contractors, PKR 24202000 as
indirect income by engagement of local labour in harvesting as disclosed by the contractors as 10% of
the harvesting amount, and amount of PKR 923000 returns from other sales e.g. grasses etc. The total
return was found more than 3 times of the expenditures. However, net income, after subtracting the
expenditures, was calculated as PKR 187778635 with an average income of PKR 9458 per acre (Table
2). By comparing the average cost and average net income per acre it is evident that the lateral is
more than double of the former which is quite significant contribution to the local economy where
previously there was no economic contribution from these sites as confirmed by participants in
focused group discussions and key informants’ interviews. The firewood that was used for household
consumption from these plantations was not monetized but the community representatives were of
the view that it has significant impact on local economy.

Symposium on Multi-Stakeholders’ Engagement in Forest/Protected Area Governance for Conservation and Livelihoods 231
Table 2: Return and Income

Status of VOs Return Labour in Other Total Av. Total Net Average
from Harvestin Returns Return Return Income Income
Harvesting g per acre per acre
(PKR) (PKR) (PKR)
(PKR) (PKR) (PKR) (PKR)

Non-existing 11933000 1193300 0 13126300 2132 -11482310 -1865

Moderate 78975000 7897500 558000 87430500 9794 51744818 5796

Strong 15111200 15111200 365000 16658820 34917 14751612

0 0 8 30919

Total 24202000 24202000 923000 26714500 13455 18777863

0 0 5 9458

In Table 3 the results of plantations under different status of VOs have been compared. It is
clear from the table that average cost per acre for all the three categories are the same i.e., PKR 3998.
The return per acre yielded by sites under Strong VOs are PKR 36139, PKR 31345, PKR 36843, PKR
42859 per acre for the planting-harvesting years 2000-2008, 2002-2010, 2003-2016 and 2006-2018
respectively, for the same periods return per acre yielded by sites under Moderate VOs were PKR
9921, PKR10504, PKR 9832, and PKR 9293 respectively, and returns per acres yielded by sites under
Non-existing VOs as PKR 2593, PKR 2046, PKR 2096, and PKR 1437 respectively. Which depicts that
sites under Strong VOs have yielded about 4 times more than sites under Moderate VOs and 13 times
more than sites under Non-existing VOs for the period 2000-2008, similarly, for the period 2002-2010
sites under Strong VOs have yielded about 3 times more than sites under Moderate VOs and 15 times
more than sites under Non-existing VOs. Furthermore, this trend remained continued for the period
2003-2016, where sites under Strong VOs have yielded about 4 times more than sites under Moderate
VOs and 17 times more than sites under Non-existing VOs, as well as in the period 2006-2018, where
sites under Strong VOs have yielded about 4 times more than sites under Moderate VOs and 29 times
more than sites under Non-existing VOs. Table-3 also shows that net income of the sites under Non-
existing VOs are in negative after deduction of the cost. These results clearly portray that strong
community organizations are vital for the productivity of plantations and can increases the
productivity of plantations sites by multifold.

Table 3: Productivity Comparison

Year of Year of VO Status No. of sites Extent Cost Av. Av. Net
Planting of Area per Return income
Harvestin
Acre per acre per acre
g (Acres)
(PKR) (PKR) (PKR)

2000 2008 Non- 4 1432 3998 2593 -1404

existing

232 Symposium on Multi-Stakeholders’ Engagement in Forest/Protected Area Governance for Conservation and Livelihoods
 Weak 7 2418 3998 9921 5924

Strong 4 1150 3998 36139 32142

2002 2010 Non- 9 3334 3998 2046 -1951

existing

Weak 6 1700 3998 10504 6506

Strong 4 2096 3998 31345 27348

2003 2016 Non- 3 900 3998 2096 -1901

existing

Weak 6 1660 3998 9832 5834

Strong 3 1220 3998 36843 32846

2006 2018 Non- 3 490 3998 1437 -2561

existing

Weak 6 3149 3998 9293 5296

Strong 1 305 3998 42859 43147

During meeting with the contractors, they disclosed that eucalyptus plantations in Malakand
yield approximately 5 tonne per acre. Average market rate per tonne for the year 2018 during market
survey was assessed as PKR 7000, market rates for years earlier than 2018 were not assessed due to
unavailability. Thus, average market value for the plantations harvested in 2018 was assessed as PKR
35000 per acre against the average per acre return of PKR 10188 from harvesting to the communities
(Table 4), showing that the community is only getting 29% of the market value. This depict that
contractors/middleman were grabbing the major share.

Table 4: Market Value vs Return from Harvesting

Year of Area Return Average Average yield Average Average

Harvestin Harveste from return per per acre rate per Market Value
g d Harvestin acre tonne in per acre
(t/acre)
g 2018
(Acres) (PKR) (PKR)
(PKR)
(PKR) (PKR)

2018 3944 40182000 10188 5 7000 35000

Symposium on Multi-Stakeholders’ Engagement in Forest/Protected Area Governance for Conservation and Livelihoods 233
 During the meeting with the contractors, they identified the main uses of eucalyptus listed in
Table 5. The contractors were of the opinion that eucalyptus was most in-demanded fuelwood for the
tobacco and other industries due to its high calorific value and major firewood source for domestic
use. They expressed it as the most demanded raw material for the composite wood industry. They
also revealed that its demand as pit prop in the mining industry was increasing while its use in boat
manufacturing was also on the rise as it has shown better results and was cheaper than its competitors
e.g., deodar etc. They also said that use of eucalyptus in furniture and construction industries was
increasing day by day.

Table 5: Uses of Eucalyptus

S. No. Use %age

1 Composite Wood Industry 20

2 Fuel wood for Tobacco Industries 20

3 Fuel wood for Gee and Steel Mills etc. 20

4 Domestic fire wood 15

5 Construction 10

6 Furniture industry 10

7 Boat industry, Mining industry, etc., etc. 5

Total 100

Conclusion

The study concludes that Eucalyptus has uplifted the economy of the local communities and has
gained the position of main income-generating crop. Overall, the plantations have changed
nonproductive barren lands and hills and transformed them to productive green resources, which are
aligned with the findings of Derba (2016) and Amare (2002). The study further confirmed that
Eucalyptus has significantly decreased the chances of erosion and flooding in the area which is in
conformity with the findings of Teketay, (2000). It has been proved as a low cost with high-profit
return cash crop for the local communities with a return of about 3 times greater than the investment.
These plantations proved as income generating sources from their day first by providing job
opportunities to the locals in planting and maintenance, and later in harvesting operations. These
plantations have also fulfilled the firewood requirements of the local communities thus discarded
their dependency on other areas and has significant impact on local economy, these findings are
aligned with the findings of Tadele et al., (2014). Community organization has a key role in the
productivity of these plantations because in the plantation areas where the communities were well
organized in the form of VOs were more productive as compare the areas lacking community
organizations. The study reflects that the communities are getting much less i.e., 29% of the market
value, portraying that the middleman or the contractors are grabbing the main part. The study founds
eucalyptus as a major fuelwood source for tobacco and other industries in the surroundings and one
of the main domestic firewood sources, these findings are aligned with the findings of Gil, et al. (2010)

234 Symposium on Multi-Stakeholders’ Engagement in Forest/Protected Area Governance for Conservation and Livelihoods
and Doran & Wongkaew (1997). The study also found that eucalyptus as a major raw material for
composite wood industry in conformity with the findings of FAO (2002).

Based on the findings it is recommended that focus on organization and reorganization of the
village communities is required to enhance the productivity of the plantation areas. Capacity building
of the communities is required on marketing and value chain management. Establishment of
Composite Wood and Paper industries well suit the area as plenty of raw materials are available. It
will not only enhance income from the eucalyptus plantations but will also create job opportunities
for the local people.

Symposium on Multi-Stakeholders’ Engagement in Forest/Protected Area Governance for Conservation and Livelihoods 235
 References

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Derba, B. (2016). Socio economic importance of selected Indigenous and Exotic Tree Species used in
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District wise Census Report of Pakistan. (2017).

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Doran, J.C., & Wongkaew, W. (1997). Eucalyptus camaldulensis Dehnh. In: Faridah Hanum, I. & van
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Tadele D., Assefa A., & Teketay D., (2014). Effect of Eucalyptus camaldulensis stands Conversion into
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Tanvir, A. (2003). Eucalyptus in Pakistan, Pakistan Forest Institute Peshawar.

http://www.fao.org/3/AC772E/ac772e0h.htm

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wise and informed decision. Workshop on Eucalyptus Dilemma, 15 Nov. 2000.

Zacharin, R. F. (1978). Emigrant Eucalypts, gum trees as exotics. Melbourne University Press.

236 Symposium on Multi-Stakeholders’ Engagement in Forest/Protected Area Governance for Conservation and Livelihoods

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