Punjab’s ambitious plan to bring two lakh hectares of farmland under agroforestry over the next five years faces a critical challenge — ensuring farmers receive a fair share of returns from the timber trade, according to a draft report by the Forest Research Institute (FRI), Dehradun, issued last month.
The report has flagged inadequate marketing infrastructure, fluctuating timber prices, and the continued dominance of middlemen as factors that could erode farmer incomes even as the state scales up its agroforestry drive. The concerns come at a time when Punjab is pushing agroforestry under its Green Punjab Mission, distributing improved eucalyptus and poplar planting material to farmers to encourage adoption.
Agroforestry involves growing trees alongside crops or other agricultural activities on farmland, giving farmers an additional source of income from timber. In Punjab, eucalyptus, poplar, drek and shisham are among the major species grown under the system.
The state forest department has now sought fresh comments from senior forest and wildlife officials on the draft report titled “Study on Marketing Mechanism of Agroforestry Produce in Punjab”, prepared by the FRI. The department has now asked officials to submit their views within a week.
The report points out that unlike conventional crops, farmers growing trees have limited marketing options and often operate in a largely buyer-driven market, allowing intermediaries to capture a substantial share of the value. The absence of an adequate government marketing policy for tree-based produce remains a key concern.
{{/usCountry}}The report points out that unlike conventional crops, farmers growing trees have limited marketing options and often operate in a largely buyer-driven market, allowing intermediaries to capture a substantial share of the value. The absence of an adequate government marketing policy for tree-based produce remains a key concern.
{{/usCountry}}The report stresses that unless market reforms accompany the expansion of agroforestry, greater tree cultivation may not necessarily translate into better and more stable returns for farmers.
For the study, the FRI surveyed around 970 of the 5,857 registered wood-based industries (WBIs) spread across Punjab’s 16 Forest Divisions, covering about 16.56% of the total units. It also surveyed timber mandis and stakeholders, including farmers, contractors, commission agents, timber traders, the State Forest Development Corporation and wood-based industries.
The study estimates that Punjab’s primary wood-based industries have an annual installed capacity of 56.12 lakh cubic metres, against a processing capacity of about 1.53 crore cubic metres. The annual supply of agroforestry wood to these industries has been estimated at 1.62 crore cubic metres. Eucalyptus accounts for the largest share of wood consumed by the industries at 61.77%, followed by poplar at 24.26%.
Despite the scale of the sector, farmers often remain dependent on contractors and commission agents due to poor market linkages, a lack of labour and transportation facilities and inadequate knowledge of industrial demand. The study found that direct sales from farmers to wood-based industries generally provide better returns, but many growers do not have established links with industries.
The North Circle survey illustrates the problem. Farmers selling poplar directly through commission agents were found to receive ₹1,000- ₹1,250 per quintal, compared with ₹900- ₹1,100 when selling through contractors. For eucalyptus, the corresponding prices were ₹900- ₹1,150 and ₹800- ₹1,000.
The study also notes that commission agents generally charge 4-10%, depending on the location, while timber traders often add another layer between farmers and wood-based industries.
To address these gaps, the FRI has recommended introducing a Minimum Assured Price for agroforestry timber to cushion farmers against price volatility, developing E-timber portals for price forecasting and online timber auctions, improving transparency in wood mandis and regulating payment schedules and intermediary charges. It has also suggested better market information systems, easier access to credit and insurance, improved grading and certification, better nursery facilities and more flexible rules for felling and transportation.