Compensatory Afforestation Fund

Ministry of Environment, Forests and Climate Change (MoEFCC) stated that it has collected over Rs. 50,000 crore in a central Compensatory Afforestation Fund (CAF).

  • This fund is to be used through the Compensatory Afforestation Fund (CAF) Act, 2016 or CAF, a purported mechanism to offset forest loss.
  • It is issued before issuing forest clearances to a mine, dam or industry, the Ministry fixes a monetary value for the forest that is to be destroyed and collects this as “compensation”. The funds are to be then used to “afforest” alternative land.
  • The fund’s growth over the past decade is a measure of the forest destruction under way in India. It is also a potent indicator of the scale of resource appropriation from some of India’s most marginalized citizens, namely Tribal communities, living in and around forests.
  • The CAF Act is a deeply flawed piece of legislation because it reduces their displacement, hardship and loss of livelihood and food sources to a monetary value — to be paid to the state.

Why has Compensatory Afforestation Failed?

  • First, growing trees is not a substitute for altering shared habitats. Urban green spaces, like forests, support a variety of life including birds and animals.
  • Second, discussions in the Supreme Court since the late 1990s and reports of the Comptroller and Auditor General have identified four reasons why CA has not worked, the foremost being the availability of land where plantations can be raised without encumbrances. Further diversion of these CA lands for other uses is a challenge. Audits have also indicated delays in fund disbursements by agencies seeking change in land use, and poor utilisation of funds by the forest department that is tasked with ensuring plantations. They are not mere implementation hassles if they have lasted so long.
  • Third, the afforestation overdrive by government departments is done in floodplains, grasslands and other ecosystems that are often not suitable for tree cover. Thus, resulting in a form of dumping saplings in sites that are empty and where trees are not appropriate.