MSP for Minor Forest Produce

Why in news?

Union Cabinet recently approved a centrally sponsored scheme for providing Minimum Support Price (MSP) to forest dwellers for minor forest produce (MFP).

What is the decision?

• The Centre has notified a varied hike in MSP ranging from 200% to 5.6% for 19 MFPs.
• The government has also added 17 more items (exiting 23) to the forest produce covered under the market support scheme.
• [These include mahua flowers, dried tejpatta, jamun dried seeds, dried amla pulp (deseeded), soap nut (dried), Arjuna bark and Giloe among others.]
• A total of 52 items is proposed to be brought under the MFP for MSP umbrella.
• The notification puts out prices for 40 items for now.
• The Central government plans to spend around Rs. 960 crore while states would contribute about Rs. 250 crore.
• The ministry of tribal affairs (MoTA) issued the notification and it is now for the states to implement this.
• Tribal Cooperative Market Development Federation of India Ltd. (TRIFED) has also been given directions.
• They are to develop market linkage between state agencies (through State Nodal Department), and bulk users and buyers to enable implementation.

What is the objective?

• The scheme for providing MSP for minor forest produce comes on the lines of support price for agricultural products.
• The decision is being taken in view of the general cost escalation on all fronts.
• The objective is to ensure fair and remunerative price to MFP gatherers.
• According to the ministry, nearly 5 crore tribals are expected to directly benefit from this revamped scheme.

What are the concerns?

• Funds - MSP system for minor forest produce had been introduced by the previous government as well.

• The centre has earmarked nearly Rs 1,100 crore for this programme in the past 5 years.
• But hardly 25% of this has been released to the states.
• The bulk of even the disbursed funds has remained unutilised.
• Moreover, none of the major forested states has submitted the audited report on funds utilisation.
• Remuneration - The minor forest resources have been made freely accessible to forest-dwellers under the Forest Rights Act.
• These include mahua, tejpatta, wild honey and similar others that have several industrial, therapeutic and cosmetic uses.
• However, the tribals, who gather them from the woods, do not get the fair remuneration for these articles.
• It's because they normally have to sell them at meagre rates at local haats dominated by cartelised traders and contractors.
• Middlemen - Some state governments have acquired monopolistic marketing rights on the much sought-after forest products.
• E.g. tendu leaves, bamboo, tamarind
• But, the state agencies nominated to lend price support often prefer to buy the stuff from middlemen.
• They fail to create the infrastructure for procuring it directly from individual collectors.
• Thus, for all practical purposes, the collectors of the minor forest produce are at the mercy of middlemen.
• MSP - States also do not pay the MSPs even though the Centre is supposed to bear 75% of the losses incurred on such operations.
• Odisha is one of the few states which have opted to implement the MSP scheme for selected forest products.
• But it is reported to be considering to discontinue the scheme because of the heavy financial burden.

What is required?

• The government has largely failed to realise the futility of raising the MSPs of crops without their effective enforcement.
• The need, therefore, is for well-advised marketing reforms in this sector.
• This should be aimed specifically at ending the middlemen’s role over the minor forest produce trade.
• Equally important is to encourage direct linkages between forest produce gatherers and end-users of these products.
• E.g. the pharmaceutical, cosmetic and food-processing industries
• These are essential to meaningfully complement the move to fix MSPs for the minor forest produce.

Source: Times of India, Business Standard