Tuesday, 15 Jan, 3.13 am Financial Chronicle

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90% of wood for paper grown by farmers in India

City: Chennai

Paper industry has always been criticised for destroying forests and precious trees. However, 90 per cent of the demand for wood in India for the paper industry is met with farm forestry or using trees specifically planted for the industry.

According to Indian Paper Manufacturers Association, the wood for manufacturing of paper comes from cultivated trees grown by farmers. Paper Industry in India is not a forest-based industry, but an agro-based industry, providing jobs and income to lakhs of farmers.

The agro forestry initiative of paper industry spreads across approximately nine lakh hectares and over 90 per cent of the demand for wood by the industry is sourced from these trees. About five lakh farmers are productively employed in this farm forestry initiative. No other industry has undertaken work of a similar nature on such a large scale anywhere in the country, claimed IPMA. "We have effectively tried to counter the myth that use of paper implies cutting of forests which is not the case at all in India. The wood for manufacturing of paper comes from cultivated trees grown by farmers. Industry has been joining forces with farmers to grow more and more trees under agro forestry initiative", said AS Mehta president-elect of IPMA.

Andhra Pradesh, Tamil Nadu, Odisha, Gujarat, Maharashtra and UP are the major states which grow trees for pulpwood. About 1,25,000 hectares are being brought under agro forestry on an annual basis in the country. The efforts by paper mills towards getting trees grown for pulpwood have intensified in the last one decade. ITC, TNPL, JK and West Coast are the major companies involved in agro forestry.

India has also emerged as the fastest growing paper market amongst large economies in the world. In the last 10 years, the domestic demand has almost doubled from around 9 million tonnes in FY 2007-08 to over 17 million tonnes in 2017-18. The Industry estimates the overall paper demand to grow at a compounded annual growth rate of 6-7 per cent, reaching to about 20 million tonnes by FY 2019-20, said Saurabh Bangur, president Indian Paper Manufacturers Association.

However, Make in India in paper is threatened cheaper imports growing at a pace faster than the growth in domestic production. Mill delivered cost of domestic wood in India is higher by almost $30-40 per tonne as compared to other Asian countries. Hence cost of paper production in India is higher by $100 per tonne.

Wood represents 40 per cent of the cost of production of paper. Energy accounts for 15-20 per cent of the cost and the cost of energy is also higher in India. If these two costs are managed, Indian paper mills will get a level-playing field and Indian paper will be as competitive as imported paper.

Even as the industry is grappling with the issue of producing paper and paperboard at competitive cost, the problem has been exacerbated by the government's policy of extending preferential tariff treatment to import of paper and paperboard under the different free trade agreements (FTAs) and other bilateral and multilateral trade agreements and pacts, finds IPMA.

"Paper is a key segment of Indian industry and government is committed to ensure domestic manufacturing. Government will consult the industry before embarking upon any further Free Trade Agreements (FTAs). Domestic players need to get priority to meet the demand. One of the main objectives of the trade policy has to be promotion of domestic manufacturing", said Suresh Prabhu, Minister of Commerce & Industry and Civil Aviation while attending an IPMA meeting.

Columnist: Sangeetha G.

Disclaimer: This story is auto-aggregated by a computer program and has not been created or edited by Dailyhunt. Publisher: Financial Chronicle