Budget 2021: Focusing on nature and people together could set a path forward for revitalising equitable rural economy

The outbreak of the pandemic gave us a window to recognise the delicate relationship between nature and people, and how inexorably the two are linked. As India looks to recover from the economic and social impacts of COVID-19, there is more need than ever to rebuild in a just and resilient manner.

The Finance Minister with the Union Budget 2021-22 has the opportunity to deliver a roadmap that prioritises development and economy without compromising on the environment. There is a need to set a green recovery path this year, which could curtail widespread unemployment and rising poverty while boosting our natural capital.

Investing in nature, protecting and restoring forests, mangroves, and agriculture landscapes could be a win-win for both climate and people. There is immense potential for forest protection and landscape restoration in India — more than 100Mha.

Growing trees where ecologically appropriate considering the larger landscape and local people’s priorities has the potential to create green jobs and livelihood opportunities while strengthening the rural economy and supporting climate action as a nature-based solution.

Improving forest and tree cover, particularly through agroforestry can revitalise the rural economy, diversify livelihoods of small and marginal land holding farmers, and non-timber forest produce (NTFP) collectors, and improve the environment and support in meeting household nutritional demand.

The 2021-22 Budget could focus on concrete steps to revitalise the rural economy as well as create jobs. This would entail special focus on value addition and creating market linkages that can spur sustained livelihoods for local communities and strengthen the restoration economy in India.

This requires policy and financial support to reduce barriers and create an enabling environment, for instance, farmer producer organisations (FPOs), self-help groups, and other forest-farmer groups to thrive.

To achieve India’s restoration potential and to meet the commitments under both the Paris Climate Agreement and Bonn Challenge, it would be critical that budgetary allocations be made to strengthen existing flagships missions and schemes such as the sub-mission on agroforestry, Van Dhan Yojna, and Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) and supporting the states in rebuilding their economy, and boosting nature conservation.

Agroforestry for increasing farmer income and livelihoods and combatting climate change

In 2014, India became the first country in the world to adopt a National Agroforestry Policy, which led to the creation of the sub-mission on agroforestry (SMAF) under the umbrella of the National Mission for Sustainable Agriculture (NMSA).

The sub-mission emphasises on the significance of agroforestry, which is the practice of integrating trees, crops and livestock in the same plot of land, in increasing tree cover to sequester above-ground carbon, enrich soil organic matter, improve productivity of crops and cropping systems, and improve livelihood opportunities of practicing farmers.

According to the NMSA data portal, since 2016, Rs 195 crore has been allocated to states that have fulfilled criteria set under the SMAF (note: allocation details are blank for 2019-20 and 2020-21); with Rs 108 crore having been released to the states till date.

Experience from states such as Karnataka, Maharashtra, Tamil Nadu, and Punjab, show that SMAF has helped farmers to grow trees on farmlands and supported famer groups/cooperatives/FPOs in setting up agroforestry systems through financial assistance, access to quality planting material and capacity building.

While there have been challenges in implementation of SMAF and some states are yet to fulfil the requirement for accessing the funds, investing in agroforestry provides a cost-effective pathway for strengthening rural and fighting climate change.

Reducing barriers to implementation would be key, given evidence indicates, for instance from Karnataka of a cost-benefit analysis of agroforestry systems by the state forest department indicates additional incomes ranging from Rs 15,000 in six months to Rs 32 lakh in seven years, with benefits as high as Rs 2.74 crore in 15 years for farmers growing high-value trees such as red sanders and sandalwood.

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MGNREGS for employment and resilience

One of the world’s largest social security programmes, the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), has also been the largest source of public funding for natural resource management activities, accounting for almost 75 percent of all public finance allocations to forest protection and landscape restoration in 2011-16.

MGNREGS has been particularly important in the last year, providing jobs and livelihood for the large number of people who returned to rural areas due to the national lockdown that crippled the economy. In Madhya Pradesh, for instance, the demand for wage employment doubled in 2020-21, compared to the previous financial year.

Given its focus on natural resource management, MGNREGS has immense potential to contribute to climate change mitigation and adaptation and be a basis for creating livelihood security for India through natural assets creation. India’s rural population is particularly vulnerable to climate events with high poverty and disproportionate dependence on weather-dependent agriculture practices.

MGNREGS’s contribution to asset and job creation is augmented by the activities carried out in climate vulnerable areas such as drought-prone and rainfed regions. These activities have significantly increased the resilience of rural population to the impacts of climate change. Further, a study assessing the carbon sequestration potential of MGNREGS activities as a co-benefit, estimates that in 2017-18 works under the scheme sequestered approximately 63 million tons of carbon dioxide equivalent.

As the country emerges from the COVID-19 crisis, MGNREGS has the ability to provide not only employment for the rural poor but could also be strengthened to create livelihoods while protecting and restoring natural resources.

Optimising these benefits requires creating district-level actionable landscape restoration implementation plans that can converge MGNREGS, and other public funds for a range of activities including green infrastructure for water, soil conservation, nursery building and growing trees.

Van Dhan Yojna for sustaining tribal livelihoods

India has nearly 250 million people dependent only on forests for their sustenance with the collection and sale of minor forest produce (MFP) contributing to 40-60 percent of tribal income. The Van Dhan Yojna targets livelihood generation for tribal Minor Forest Produce (MFP) gatherers and developing entrepreneurship by setting up tribal community owned Van Dhan Vikas Kendras (VDVKs).

Since 2018, 1,205 VDVKs have been established with disbursement of Rs 165 crore and benefiting 3.7 lakh tribal people. With an aim to establish 50,000 VDVKs, the Ministry of Tribal Affairs will be looking at the union budget to help achieve this goal.

The impact of COVID-19 is reverberating across the country. In addition to the lives lost, it has pushed millions of people into poverty with high unemployment, disrupted supply chains and low economic activity. However, it also presents an opportunity to build back better, with balanced focus on both environment and development.

India already has several schemes that can support green development and all eyes are on the Union Budget to see how these schemes will be sustained further. By prioritising nature and people together in the Budget, the Finance Minister can showcase India’s commitment to holistic green growth with a leaning towards India's rural population, especially men and women farmers to build their resilience to future economic crises and climate change.

For YourStory's multimedia coverage of Budget 2021, visit YourStory's Budget 2021 page or budget.yourstory.com