Model Bankable Project

on
Bamboo based agroforestry

National Bank for Agriculture and Rural Development

1. Introduction

Bamboo is a versatile, strong, renewable and environment-friendly material. It is a

member of the grass family, Gramineae and the fastest growing woody plant on earth.
Most bamboo species produce mature fibre in 3 years, sooner than any tree species. Some
bamboo grow up to 1 metre a day, with many reaching culm lengths of 25 metre or more.
Bamboo can be grown quickly and easily, and sustainably harvested in 3 to 5 years cycles.
It grows on marginal and degraded land, elevated ground, along field bunds and river
banks. It adapts to most climatic conditions and soil types, acting as a soil stabilizer, an
effective carbon sink and helping to counter the greenhouse effect.

In many areas, bamboo resources have dwindled due to over exploitation and poor
management. This issue needs to be addressed through well-organized cultivation, on the
lines of homestead, small-holder and plantation-based cultivation. The role of bamboo in
community agroforestry as a means of generating income for the rural poor is very
important.

Production of bamboo is only the starting point. The real benefits accrue from value-
added products. Handicrafts (mats, baskets, tools, toys and utensils) and furniture are
established possibilities, produced in finished form or supplied as components to small
enterprises for further processing (for example, supply of mats for production of bamboo
mat board). There are emerging industrial and large-scale applications too in the
manufacture of wood substitutes and composites, energy, charcoal and activated carbon.
Building and structural components represent vast possibility for enterprise, value
addition, income and employment.

2. Bamboo flowering

Most bamboo flower only once in their lifetime, and die soon after. Bamboo flowering is
a mystery to scientists. Probably they have an in built alarm clock set to go off at a
particular time with all populations of a species raised from a single seed source flowering
simultaneously no matter where situated. The flowering cycle generally varies from 7-120
years and in some the interval is 3 years and a few may even flower annually. Some
bamboo however have never been observed to flower e.g. B.vulgaris. B. nutans having
the longest flowering cycle of 120 years need promotion for planting.

Cultivation practices of Bamboo

3. Propagation

Bamboo are generally propagated vegetatively, although they are best raised through
seeds. Seedlings are raised in nursery beds and allowed to develop for a year in poly pots
after which they are transplanted in the field. As bamboo seeds are rarely available, they
are propagated through rhizomes or culm cuttings. In rhizome planting, one year old
culms with roots are dug up, cut to about a metre high and planted during rainy seasons.
Vegetative propagation of bamboo is an age old method and is practiced everywhere.
Irrigation is necessary after planting.

4. Tissue culture bamboo

Buds with 1.0 - 1.5 cm nodal segments can be used to initiate and establish in vitro culture.
Clumps of donor bamboos should be young. Explants of nodal buds may be collected in
late February or in March. Nodal buds should be green and generally buds of upper nodes
should initiated to sprout. Collected buds should be clean, sized and washed under
running water. HgCl2 and a few drops Tween 20 (Polyxyethylene sorbitan Monolaurate)
can be used to surface sterilized explants. The sterilized nodal buds may be cultured in
semi-solid gel of MS and supplemented with BAP (1.0 mg/l). Selected buds should
sprouted within three - four weeks. The sprouted buds should culture in liquid MS
supplemented with BAP (1.0 mg/l) for two - three weeks. By this time sprouted buds will
be elongated and developed into a number of multiple shoots. The latter shoots will be
used as explants either as a single or a cluster of two - three shoots for production of
additional multiple shoots and root induction.

Macro- and micronutrients of MS medium and vitamins and other organics of B5 medium
should be used in the transfer cultures. In the second phase also BAP (1 - 5 mg/l) should
be added to semi-solid gel or liquid media for induction of multiple shoots. For induction
of roots in the excised shoots, NAA (1 - 3 mg/l) and IBA (1 - 3 mg/l) were used. Prior to
final transfer into soil, plantlets which were already in soil with well-developed roots were
cultured for one - two weeks in water. Within a period of three - four months the plantlets
transferred to the propagation bed produced mini-clumps of shoots in abundance. Roots
grew on the shoot bases of miniclumps. The rooted shoots of mini-clumps proliferated
further when individual Micro-cloning in Commercially Important Six Bamboo species
105 mini-clumps were separated and planted in the specially prepared planting beds. This
procedure was found most suitable for large scale shoots multiplication or for their
storage in bags until field planting.

5. Soil

Most Bamboos are found in sandy loamy to loamy clay soil, derived from river alluvium
or underlying rock. Although bamboos prefer a well-drained soil, it is observed to grow
even in swampy soils. The soils of Barak valley vary from clay to clay loam to sandy loam
and soil reaction is acidic with pH of 4.5 to 6.0 a luxurious growth of bamboo is a common
feature and therefore, the soil and climatic conditions are best suited for cultivation of
bamboo.

6. Land Preparation

Before planting bamboo seedlings, test the condition of soil, particularly for acidity.
Bamboos grow best in slightly acidic soil. It may be that you would need to put in lime to
adjust its pH level to a degree most suitable for bamboo growing.

7. Planting

The planting will be taken up with the onset of monsoon. Pits of 60 cm x 60 cm will be
dug and the seedlings will be planted at a spacing of 4m x 4m. The number of plants per
acre is 200. A provision has been made for casualty replacement to the extent of 20%.

8. Spacing

For most species a spacing of from 3m to 8m between clump centres is usual. Spacing and
no of plantation for bamboo plantation shown in the annexure I. A plot with poorer soils
should be planted at 8 metre centres and richer soils at 3 metre intervals. The proper
number of plants is about 400 to 800 per hectare.

Bamboo can be grown and get first harvest from the third year or fourth year or from the
fifth year as per the number of plants planted in one acre.

Plantation Type No of Spacing No of Weight of Year of

plants (Feet) poles the pole Harvesting
per acre per (Kg)
clump
High density
1000 10 x 4 6-7 6-7 3rd year
Plantation
Medium density
600 12 x 6 8 9 4th year
Plantation 1
Medium density
450 10 x 10 9 10 -12 5th year
Plantation 2
Low density
200 15 x 15 10 20-25 5th year
Plantation

All the above density of bamboo yield 30 tons/acre during 1st harvest, 35 tons/acre during
2nd harvest, 40 tons/acre from 3rd harvest onwards. Once the bamboo is ready for harvest,
it can be harvested on an annual basis adapting manual harvest, wherein poles which are
over one year is selectively harvested leaving behind poles which are less than one year,
which could be ready for harvest in the next year. There is no need to replant at least for
the next 50 years.

9. Fertilization

The application of fertilizer is most important during transplantation from nursery to

main field. Bamboo is a heavy feeder and therefore, even a rich soil might become
depleted after a few years if no fertilizer is added. The fertilizers although may be applied
at any time in a year, it is preferred to apply after harvest and before irrigation. It should
be noted that rhizomes continue to be active (growing) except in the coldest part of the
year. It is therefore proper to apply small quantities of fertilizers round the year than
one/two large doses. Bamboo responds well to nitrogen and potassium which are found
in compost, green manure, wood ash and chemical fertilizers. Lime is often applied to
neutralize soil acidity.

10. Harvesting and yield

The annual yield of a bamboo clump depends on the number of new culms produced each
year. Culms become mature after two to three years. To maximize shoot output some
shoots must be left each year to develop into leafy young culms. It is reported that bamboo
clump on an average produce 10 culms in a year under good growing conditions. There
will be 6 clumps from 5th year and will increase to 8, 10 and 12 in 6th, 7th and 8th year
respectively. Considering a 30 year of life cycle one clump may produce 300 culms on the
whole. The harvesting can be done from sixth year onwards for commercial production.
The annual yield in tonnes/ ha depends on the environment as well as the species. It is
generally 3-4 tons/ha as understory in forest and 5-12 tons/ ha from plantations. In the
drier parts of India, well managed and technology based D. strictus plantations give yield
of 10 tons/ha.

11. Unit cost and Economics

For model 4x4, the unit cost (capitalized for 4 years) for raising bamboo in a hectare
through tissue culture material with drip irrigation has been come out as Rs. 1,85,000/-,
considering rotation of 4 yrs with and farm gate price of poles in the range of Rs. 50-75
per culm of bamboo. The IRR comes out to be 21.34% for eight years. The project is
financially viable at the above expenditure and income levels. The financial indicators for
one hectare bamboo plantation are given in the Annexure.

For model 6x4, the unit cost (capitalized for 4 years) for raising bamboo in a hectare
through tissue culture material with drip irrigation has been come out as Rs. 1,55,000/-,
considering rotation of 4 yrs with and farm gate price of poles in the range of Rs. 50-75
per culm of bamboo. The IRR comes out to be 21.34% for eight years. The project is
financially viable at the above expenditure and income levels. The financial indicators for
one hectare bamboo plantation are given in the Annexure II.
 Models Unit cost Bank Expected yield (1st IRR
(Rs) Loan rotation)*(MT/ha)
A (4mx4m) 1,85,000 1,66,000 50 29.01%
B(6mx4m) 1,44,000 1,31,000 40 18.46%

12. Lending Terms

Margin Money

The beneficiaries may contribute towards down payment ranging from 10% depending
upon their category, i.e., small and other farmers. Beneficiary’s own labour can also be
taken as his contribution towards the margin money requirement. In case of current
model scheme margin money of 10 % has been considered. With 10% margin money,
banks will provide lending of Rs. 1, 66, 000/-.

13. Repayment period/Interest rates

The bank loan is considered at 90% of the unit cost i.e. Rs. 1, 66, 000 /- . Income
generation from the activity commences from fifth year onwards. The interest accrued
during the gestation period will be deferred. The rate of interest to the ultimate borrowers
will be decided by the financing banks which is subject to revision by RBI / NABARD from
time to time. The repayment of principal with deferred interest will start from 4 th year of
plantation and will be paid upto 6th year maximum.

14. Commercial uses of Bamboo

 Decorative and shuttering plywood, various board products such as block
board, wafer board, strip board, laminated boards, roofing sheets
 Earthquake-resistant and long-lasting conventional housing and buildings.
Two-floored rural houses.
 Improved roads, bridges, culverts, retaining walls
 Water-tanks, biogas plants, telephone/electricity poles
 Furniture; fuel-wood, charcoal and briquettes, active carbon
 Matchsticks, agarbattis, toothpicks, skewer sticks, etc.
 Schooling: pencils, rulers, blackboards
 Pulp and paper, particle board, MDF, handicrafts
 Prevent landslides, soil and riverbank erosion
 Bamboo shoots as food.
 Annexure I

Spacing and no of plantation for bamboo plantation

The ideal spacing for bamboo plantation is 4x4 and 6x4 metre. With this much spacing the
number of trees in a hectare is 625 and 400 respectively. The figures are given below with no. of
plants according to the spacing. The ideal crops for intercropping with bamboo are turmeric and
ginger or any shade loving medicinal plants.
 Annexure II

Unit Cost for Tissue Culture Bamboo cultivation with drip irrigation (One ha model -B)

Techno-economic parameters

Species recommended Bambusa balcoa, Bambusa tulda, Bambusa hamiltonii (Tissue Culture)

Spacing (m x m) 4x4 Economic Life 25 - 30 years

No. of plants per ha. 625 Avg. wage rate per MD (Rs.) 200

Mortality replacement 10% Interest on term loan 12%

No. of harvestable plants per ha 100% Margin (of the total cost) for Bank Loan 10%

Year of harvesting (year) 4

S. Particulars Unit Qnty Rate 1 2 3 4 Total

No

1 Site preparation MD 12 200 2400 2400

2 Initial ploughing MD 24 200 4800 4800

3 Alignment & Staking MD 5 200 1000 1000

4 Digging of Pits 15 pits 42 200 8400 8400

(45x45x45cm) & Refilling /MD
of pits after mixing FYM,
fertiliser & insecticides

5 Cost of FYM @ 3kg/pit Trolley 2 2000 4000 4000

6 Cost of Fertilizer @ 100 kg 63 3 189 189

gm/plant ( SSP & MOP)

kg 156 5 780 780

kg 313 7 2191 2191

7 Cost of insecticides Rs. LS 1000 0 0 0 1000

including application

8 Cost of plants Number 625 40 25000 25000

Cost of Plants i/c casualty 63 40 2520 2520

replacement
9 Planting & Replanting MD 15 200 3000 3000
(Unloading & shifting
included)

MD 4 200 800 800

10 Weeding (3 weeding in MD 20 4000 4000

the 1st 200

yr, 2 weeding in the 2nd 30 6,000 6000

yr 200

and 1 weeding in the 3rd 35 7,000 7000

yr 200

11 Soil working (2 working 8 MD/ 8 200 1600 1600

in the I yr and 3 workings working
thereafter)

8 200 1600 1600

12 Drip Irrigation Drip LS 50000 50000

System

Energy (Diesel / 6000 6000 6000 6000 24000

Electricity) charges
 13 Pruning from 3rd year MD 5 200 1000 1000

14 Fencing / Live Hedge and Rs. LS 15000 15000

Maintenance

LS 2000 2000

Sub Total Rs. 126389 17700 18191 6000 168280

contingency 10% 12639 1770 1819.1 600 16828

Grand Total Rs. 139028 19470 20010 6600 185108

Round off 139000 19000 20000 7000 185000

Bank loan @ 90 % of cost Rs. 125100 17100 18000 6300

Round off 125000 17000 18000 6000 166000

Yield and income

Harvesting may be done after 4th year onwards

As culms
 Year No. of culms per Nos. of culms per ha. Net Sale Price (after deduction Income (Rs)
clump Harvesting & Transportation cost of
Rs.5/culm)

Year 5 6 3750 50 187500

Year 6 8 5000 60 300000

Year 7 10 6250 75 468750

Year 8 12 7500 75 562500

ECONOMICS

Cash flow has been worked out upto 8 years for the purpose of financial analysis & repayment

Cash flow (Rs.)

Years >>> 1 2 3 4 5 6 7 8

Cost 139000 19000 20000 7000 7000 7000 7000 7000

Income from Agriculture

crop

Income from Culms 0 0 0 0 187500 300000 468750 562500

 Net Income -139000 -19000 -20000 -7000 180500 293000 461750 555500

DF@15 0.870 0.756 0.658 0.572 0.497 0.432 0.376 0.337

NPV Cost 120870 14364 13160 4004 3479 3024 2632 2359

NPV Ben. 0 0 0 0 89709 126576 173618 187204

NPW -120870 -14364 -13160 -4004 89709 126576 173618 187204

BCR 3.89

IRR 21.34%

REPAYMENT SCHEDULE

Repayment Period (years) 4

Grace Period (years) 3

Bank Cum. Repayment

Year loan Cum. BL Interest @ Int. Total out - Income

0.12 standing Principal Interest Surplus

 1 125000 125000 15000 15000 140000

2 17000 142000 17040 32040 174040

3 18000 160000 19200 51240 211240

4 6000 166000 19920 71160 237160 187500 166000 71160 -49660

5 0 49660 5959 55619 300000 0 55619 244381

6 468750 468750

7 562500 562500

Assumptions:

1. Protective / pot irrigation is provided during the initial years.

2. Seedlings: It is assumed that seedlings will be purchased from govt forestry nursery or from private nursery
3. Labour Charges: Assumed average wage rate@ Rs.200 prevailing in the state
4. cost of cultivation provided for 1+2 years for all the crops(1 year for establishment +2 maintenance)
5. Though the gestation period is 8-10years ,loan instalments provided for 4years,the remaining years of gestation period bank
may charge interest on the outstanding loan amount and the years in term may be kept separate and not to be compounded.
Both the principal and interest can be recovered after the harvest. This is to be there is no income generation either from the
main crop or inter crop.
6. Cost of intercropping is not covered under this structure.
Unit Cost for Tissue Culture Bamboo cultivation with drip irrigation (One ha model - B)

Techno-economic parameters

Species recommended Bambusa balcoa, Bambusa tulda, Bambusa hamiltonii (Tissue Culture)

Spacing (m x m) 6x4 Economic Life 25 - 30

years

No. of plants per ha. 400 Avg. wage rate per MD (Rs.) 200

Mortality replacement 10% Interest on term loan 12%

No. of harvestable plants per ha 100% Margin (of the total cost) for Bank Loan 10%

Year of harvesting (year) 4

S. No Particulars Unit Qnty Rate 1 2 3 4 Total

1 Site preparation MD 10 200 2000 2000

2 Initial ploughing MD 20 200 4000 4000

3 Alignment & Staking MD 5 200 1000 1000

4 Digging of Pits 15 pits 30 200 6000 6000
(45x45x45cm) & /MD
Refilling of pits after
mixing FYM, fertilizer &
insecticides

5 Cost of FYM @ 3kg/pit Trolley 2 2000 4000 4000

6 Cost of Fertilizer @ 100 kg 30 3 90 90

gm/plant ( SSP & MOP)
kg 80 5 400 400

kg 150 7 1050 1050

7 Cost of insecticides Rs. LS 1000 0 0 0 1000

including application

8 Cost of plants Number 400 40 16000 16000

Cost of Plants i/c 40 40 1600 1600

casualty replacement

9 Planting & Replanting MD 15 200 3000 3000

(Unloading & shifting
MD 4 800 800
included)

200
10 Weeding (3 weeding in MD 20 200 4000 4000
the Ist
MD 30 200 6,000 6000
yr, 2 weeding in the 2nd
MD 35 7,000 7000
yr

and 1 weeding in the 3rd

yr 200

11 Soil working (2 working 8 MD/ 8 200 1600 1600

in the 1 yr and 3 working
8 200 1600 1600
workings thereafter)

12 Drip Irrigation Drip LS 40000 40000

System

Energy (Diesel / 3000 3000 3000 3000 12000

Electricity) charges

13 Pruning from 3rd year MD 5 200 1000 1000

14 Fencing / Live Hedge Rs. LS 15000 15000

and Maintenance
LS 2000 2000
 Sub Total Rs. 100690 13400 14050 3000 131140

contingency 10% 10069 1340 1405 300 13114

Grand Total Rs. 110759 14740 15455 3300 144254

Round off 111000 15000 15000 3000 144000

Bank loan @ 90 % of
cost Rs. 99900 13500 13500 2700

Round off 100000 14000 14000 3000 131000

Yield and Income:

Harvesting may be done after 4th year onwards

As culms

Year No. of culms Nos. of culms per Net Sale Price (after deduction Income (Rs)
per clump ha. Harvesting & Transportation cost of
Rs.5/culm)

Year 5 6 2400 40 96000

Year 6 8 3200 50 160000

 Year 7 10 4000 60 240000

Year 8 12 4800 60 288000

ECONOMICS:

Cash flow has been worked out upto 8 years for the purpose of financial analysis & repayment

Cash flow (Rs.)

Years >>> 1 2 3 4 5 6 7 8

Cost 111000 15000 15000 3000 3000 3000 3000 3000

Income from
Agriculture crop

Income from Culms 0 0 0 0 96000 160000 240000 288000

Net Income -111000 -15000 -15000 -3000 93000 157000 237000 285000

DF@15 0.870 0.756 0.658 0.572 0.497 0.432 0.376 0.337

NPV Cost 96522 11340 9870 1716 1491 1296 1128 1011

NPV Ben. 0 0 0 0 46221 67824 89112 96045

 NPW -96522 -11340 -9870 -1716 46221 67824 89112 96045

BCR 2.54

IRR 18.46%

REPAYMENT SCHEDULE

Repayment Period (years) 4

Grace Period (years) 3

Year Cum. BL Repayment

Interest Cum. Total out Income
Bank loan @ 0.12 Int. standing Principal Interest Surplus

1 100000 100000 12000 12000 112000

2 14000 114000 13680 25680 139680

3 14000 128000 15360 41040 169040

4 3000 131000 15720 56760 187760 96000 131000 56760 -91760

 5 0 91760 11011 102771 160000 0 102771 57229

6 240000 240000

7 288000 288000

Assumptions:

1. Protective / pot irrigation is provided during the initial years.

2. Seedlings: It is assumed that seedlings will be purchased from govt forestry nursery or from private nursery
3. Labour Charges: Assumed average wage rate@ Rs.200 prevailing in the state
4. cost of cultivation provided for 1+2 years for all the crops(1 year for establishment +2 maintenance)
5. Though the gestation period is 8-10years ,loan instalments provided for 4years,the remaining years of gestation period bank
may charge interest on the outstanding loan amount and the years in term may be kept separate and not to be compounded.
Both the principal and interest can be recovered after the harvest. This is to be there is no income generation either from the
main crop or inter crop.
6. Cost of intercropping is not covered under this structure.
 DISCLAIMER

The models have been prepared based on information gathered orally or otherwise
from various sources and no financial responsibility is accepted by NABARD for
accuracy of facts and figures. The views expressed in this model project are advisory
in nature. The actual costs and returns will have to be taken on a case by case basis
considering the specific requirements of projects. The banks, government
departments and other users are advised to use it only as a reference document and
use their own judgment for sanctioning or execution of the projects.