Socio-economic impact of Biofuel Agroforestry Systems on Smallholder and Large-holder Farmers in Karnataka, India

Biofuel production systems used hitherto have often been marred by controversies such as food versus fuel and the failure of Jatropha plantations. Biofuel Agroforestry Systems have the potential to address these concerns. This paper analyses the tree borne non-edible oilseed production benefits, generated by planting number multipurpose trees grown on the bunds and borders of agricultural fields including marginal and degraded lands known as Smallholder Biofuel Agroforestry System. It considers two different strategies (strategy 1 and 2) for both Smallholder and Large-holder Farmers for analysis. In each case, the two strategies differ in terms of the magnitude of investment required; the operational practices required and the net incremental benefit potential at the farm level. The tree species being used are Pongamia (Millettia pinnata), Simarouba (Simarouba glauca), Rubber (Hevea brasiliensis) and Neem (Azadirachta indica). The aim of this study is to understand and analyse the socio-economic impact of Karnataka State Bioenergy Development Board’s (KSBDB) Programme on Biofuel Agroforestry System on Smallholder and Large-holder Farmers. Field interviews and corresponding economic modelling analysis shows that the Programme has potential to deliver a small incremental income to Smallholder Farmers, especially during the ‘lean’ non-harvesting period of the year. The sensitivity analysis around the seed and end-product prices shows that Biofuel Agroforestry System has a potential to boost income levels of Smallholder Farmers by a significant amount—up to 60% over starting income in a time period of 25 years.