Tree mortgage programme helping an Indian village to be carbon neutral

A village in Kerala, India has initiated a project that will allow farmers to mortgage the trees on their land in return for interest-free bank loans.

The exhaustive government-backed project was launched within a small town called Meenangadi of Wayanad district in Kerala by state minister TM Thomas Isaac after he returned from the Paris climate change conference back in 2016, reports Indian Express. 

It's a simple incentive with big gains: plant a tree, and after three years residents can mortgage each sapling for an interest-free loan that can be renewed annually for 10 years. The money needs to be repaid only if the tree is chopped down.

Recently The Guardian published a special feature on this, where they mentioned a story of a local farmer named Sheeja CG, a 46-year-old farmer, who has lived among coffee, coconut and pepper plantations all her life but last month she increased her income dramatically by mortgaging 53 of her trees at the local bank, in return for a sum of 2,650 rupees (£26.96), or 50 rupees each. She was one of the first beneficiaries of the state-sponsored scheme.

Kerala, with its sweeping, spice-filled forested landscape has long struggled with its ailing farming sector which has led them to impact by staggering loss of biodiversity, climate crisis and unusual increase of warming - in a place which used to be relatively cool. Suicides of farmers, landslides and floods have made the headlines. Farmers have been compelled to fell trees to supplement their income. 

"With temperatures almost five degrees higher than normal, I've faced a crop loss of 25%. The loan from the tree banking scheme will ease financial pressure. I will buy manure for my farm," sais Sheeja.

Beena Vijayan, head of the local panchayat, said, "Each sapling can be pledged for Rs 50 per year for a period of 10 years. So if a farmer pledges 100 trees on her land, the bank will pay her Rs 5000 per year for 10 years in the form of a loan. While the interest on the loan is paid by the panchayat, the farmer has to pay only the principal amount, that is, if she decides to cut the tree. If she chooses not to cut down the tree, the loan doesn't have to be repaid."

According to her, the state government had deposited a corpus fund of Rs 10 crores for the project. The interest from the deposit is used to pay the interest off the loans given to farmers. 

According to the Kerala State Action Plan on Climate Change, Wayanad is one of the four major climate change hotspots in the state. But the tree banking scheme has an ambition to reverse the damage and turn Meenangadi, a town of about 35,000 people into a carbon neutral region. 

The Carbon Neutral Meenangadi Project is the first of its kind in India, and has changed the way the community lives and works.

Local panchayat has listed 34 species of trees that farmers can plant on their land which include mango, jackfruit and pine. They are hopeful to changing the region's farming landscape with large-scale planting of fruit trees, with a view to have a self-sustainable and even become home to a fruit-processing industry in future.

Jayakumar C, founder of Thanal, the environment agency that is implementing the project said, "Wayanad has the lowest per capita income in Kerala state, so the aim is to double the income of the farmers without overly industrialising the region."