Lok Sabha Question No. 3736 (UNSTARRED), answered on 2018-03-19
Subject: MSP for Minor Forest Produce
Ministry: TRIBAL AFFAIRS
Asked by: Tejpratap Singh,Yadav

## GOVERNMENT OF INDIA (MINISTRY OF TRIBAL AFFAIRS)

## LOK SABHA

## UNSTARRED QUESTION NO. 3736

TO BE ANSWERED ON 19.03.2018

## MSP FOR MINOR FOREST PRODUCE

## 3736 SHRI TEJ PRATAP SINGH YADAV:

Will the Minister of TRIBAL AFFAIRS be pleased to state:

- (a) whether  the  Government  is  planning  to  introduce  the  modified  scheme  of  providing Minimum Support Price for Minor Forest Produce;
- (b) if so, the details thereof;
- (c) the  number of  forest  dwellers  dependent  on  the  Minor  Forest  Produce  (MFP) for  their livelihood;
- (d) the details of the guidelines regarding Minimum Support Price (MSP) for MFP;
- (e) whether there is need for streamline forest-mandi linkage, to build value addition centres, to  set  up  Self-help  Groups  to  create  auctioning  system  and  technology  backbone  for successful implementation of the scheme; and
- (f) if so, the steps taken by the Government to provide fair and equitable deal to tribals in the country?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF TRIBAL AFFAIRS (SHRI JASWANTSINH BHABHOR)

- (a) No, Madam.
- (b) Does not arise in view of reply to (a) above.
- (c) While there are no accurate figures on the number of people who depend on MFPs and the percentage of income that they derive from them, it is estimated that 100 million people derive their source of livelihood directly from collection and marketing of MFPs (Report of the National Committee  on Forest Rights Act,  2011).
- (d) Information to this part of the question is given at Annexure.
- (e) Recognizing the need for value addition, primary processing, etc. involving tribals, Gram Sabha/Panchayati Raj Institutions and disposal/sale of procured MFP items, the scheme guidelines provide for supporting such activities.
- (f) Fixing  Minimum  Support  Prices  supported  by  field  inputs  and  studies  ensures  fair monetary returns to MFP gatherers for their efforts and input costs. The Ministry of Tribal Affairs also provides its share of expenditure in developing and modernization of Haats, providing storage and trading facilities at aggregation points, Multi-purpose Centres for training. Primary processing and  value  addition  in  MFP,  Strengthening  of  State  Institutions,  Capacity  building  of  Gram Sabha/Panchayati  Raj  Institutions,  Development  of  Market  Information  system,  expanding knowledge base on MFP, training for sustainable collection, etc.

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## Statement in reply to part (d) of Lok Sabha Unstarred Question No.3736 for answer on 19.03.2018 regarding 'MSP for Minor Forest Produce'.

Guidelines  of  the  scheme  'Mechanism  for  marketing  of  Minor  Forest  Produce  (MFP) through Minimum Support Price (MSP) and Development of Value Chain for MFP' as a measure of social safety for MFP gatherers.

## 1. Introduction:

An estimated 100 million forest dwellers depend on the Minor Forest Produce (MFP) for food, shelter, medicines, cash income etc. Contribution of MFP to the house hold income varied between 10 to 70 percent and about 25 to 50 percent forest dwellers depend on them for food requirement.

The price of MFP is most often determined by the traders than by demand /supply (barring few high revenue items nationalized by the state governments). Most of the MFP rich states are affected by left wing extremism making it easier for unscrupulous traders to operate freely in the market and the state is many a time unable to play effective role in checking the exploitation of the gatherers.

Based  on  Inter-  state  and  inter-ministerial  consultation,  suggestions  of  the  Planning commission and Expenditure Finance Committee the scheme 'Marketing of Minor Forest Produce (MFP) through Minimum Support Price (MSP) and Development of Value Chain for MFP' as a measure of social safety for MFP gatherers' was formulated. The scheme was finally approved by the cabinet on 01-08-2013 for its implementation during the 12 th plan period and beyond bases on its evaluation.

The scheme has been designed as one of the social safety measures for the Minor Forest Produce (MFP) gatherers, who are primarily members of Scheduled Tribe. It seeks to establish a system to ensure fair monetary returns for their efforts in collection, primary processing, storage, packaging, transportation etc. It also seeks to get them a share of revenue from the sales proceeds with cost deducted. It also aims to address other issues for sustainability of process.

2. Objectives: The basic objective of the scheme is to ensure fair returns to the MFP gatherers mainly through minimum support price for identified MFP collected by them along with necessary infrastructure at local level.
3. Fixation of MSP for MFP: Minimum Support Price would be determined based on the baseline survey of price for each of the MFP, its cost of collection, cost of cleaning and primary processing,  packaging  and  transportation  cost  for  each  state.  A  Pricing  Cell  constituted  in  the TRIFED would be assigned this task. The Ministry will finally approve and announce state wise MSP for each MFP taken up for that state. The price review would be carried out every three years based on revision in cost of collection.

## 4. Coverage of MFP and the Coverage Area:

The scheme will initially be implemented in States having areas under V Schedule of the Indian constitution for non- nationalized and abundantly available items out of 12 MFP namely (i) Tendu,    (ii) Bamboo,  (iii) Mahuwa Seed,   (iv) Sal Leaf,  (v) Sal Seed, (vi) Lac, (vii) Chironjee, (viii) Wild Honey,i(x) Myrobalan,  (x) Tamarind, (xi) Gums (Gum Karaya) and(xii) Karanj.

Any MFP nationalized for  procurement  would  stand  deleted  from  coverage  under  this scheme for that state. Similarly, MFP removed from monopoly procurement, can prospectively qualify for coverage under the scheme provided such change is effected at least six months prior to commencement of harvest season but not later than 31 st December of the preceding calendar year. Once non-nationalized MFP is included for MSP under the scheme, it will continue to be in that list for at least three years.

## 5. Composition of the Scheme and Financial Requirements

The scheme has following main components:-

- 5.1 Revolving Fund: A revolving fund will be operated at state level for upfront payment for procuring MFP for the initial two years on 75:25 sharing by the Central and participating state governments. After the MFP is disposed off, the proceeds there from, shall be credited back to this fund. A budgetary provision of Rs.345.00 crore has been proposed in the scheme for this purpose.
- 5.2 Fund to meet the losses: The scheme envisages operation of a separate fund to meet the losses to the state agencies on 75:25 sharing between the Central and State governments. The fund will be made available to state agencies on yearly basis, based on their audited accounts and vetting by TRIFED. The fund requirement has been estimated as Rs. 285.00 crore (central share).
- 5.3 Expansion of Storage and Trading facilities at the State level: In order to operationalize the scheme, necessary infrastructure such as godowns, cold storage, processing facilities, transport facilities, etc. will be required for states which do not have adequate infrastructure. The estimated budget earmarked for this purpose is Rs.37.50 crore for the 12 th plan.
- 5.4 Modernization of Haat: Modernization of haats with permanent structure and facilities for storage, drinking water, shade, platforms etc., in a phased manner is an essential component of the scheme. Total budget of Rs.80.00 crore has been proposed; of which states shall bear 25% i.e Rs.20.00 crore and balance 60.00 crore shall be met by the Government of India.
- 5.5 Creation of Storage facility at aggregation points : The scheme seeks to establish small godowns of 50 MTs capacity at block level to aggregate the stocks procured at haats spread over the entire area under the block. The total requirements of funds have been estimated at Rs.28.00 crore out of which Center's share will be 75%, i.e. Rs.21 crore and the State's share will be 25% i.e 7.00crore during the 12 th Five year plan. Apart from this state's share, the cost of land and recurring expenses will also be met by respective state agencies.
- 5.6 Multi purpose Centre for training, primary processing, value addition in MFP and storage/ (warehouse and cold storage) facilities: To facilitate  capacity  building,  training  for value addition, storage, marketing of MFP and warehousing and cold storage facilities, TRIFED will  initially  establish  five  multipurpose  centers  in  the  first  phase  (12 th Five  year  plan)  at  an estimated capital cost of Rs 71.00 crore.
- 5.7 Strengthening of State Institutions/ Service Charge of the State Agency: An incentive of 2% (of the base procurement value of MFP) to encourage the State Governments has been envisaged in the scheme for the initial five years and tentatively an amount of Rs.30.64 crore will be admissible as service charge to the state agencies for the twelfth plan period.
- 5.8 State Agency will also work to ensure that Aadhar numbers are seeded in the beneficiary account at the earliest. Periodic reviews will have to be undertaken in the initial period for linkage of Aadhar numbers with the system.
- 5.9 Capacity Building of Gram Sabha/ Panchayati Raj Institutions :  Linkages with the 'Mahila  Sashaktikaran  Pariyojana'  launched  under  NRLM  initiative  would  be  ensured  for participation of MFP gatherers and their capacity through the gram Sabhas. Estimated budget for the purpose is Rs. 20.00 crore for 12 th plan period.
- 5.10 Development of market information system: In order to ensure fair returns to the MFP collectors on a long term basis, MFP market information system will be developed.  An advance information and communication technology based Scheme (MFPNET) shall be established for speedy  collection  and  dissemination  of  market  information.  To  start  with,  trade  information through ITeS facility for quoting daily prices of the commodities traded along with quantity traded at major mandis like Khadi Baoli of Delhi through messaging and web based services would be created by TRIFED in collaboration with state level agencies.  Daily prices and quantity traded at major mandis/bazaars would also be displayed on the web of TRIFED and state level agencies.
- 5.11 Expanding the knowledge base on MFP, training for sustainable collection, value addition, etc Appropriate training will be provided by the TRIFED to the stakeholders regarding resource regeneration, improved practices for extraction and value addition of MFP. An estimated budgetary requirement for undertaking these activities is 54.40 crore for the 12 th plan period.
6. Institutional  mechanism and Monitoring: The Ministry of Tribal Affairs  (MOTA), Government  of  India  shall  be  the  nodal  Ministry  for  operationalising  the  Scheme.  State Governments will be responsible for implementation, supervision and monitoring of the scheme by constituting state level coordination and monitoring committee under the chairmanship of the Chief Secretaries and district  level  coordination  and  monitoring  committee  headed by  District Collector for monitoring the scheme at the state and local level.  Ministry of Tribal Affairs in association with TRIFED will monitor the performance of designated state agencies and review it periodically.  TRIFED and the state agencies would keep close watch on the market prices during procurement season. Whenever the market price falls below the MSP, state agencies would start procurement. For this purpose, TRIFED will establish a trade information system for broadcasting daily  prices  through  web  and  web  enabled  SMSes.    Such  information  will  be  collected  and forwarded to the TRIFED by market correspondents. It would scrutinize the accounts of the State Agencies.

## 7. Duration of the scheme:

The scheme has been launched during 2013-14 and will continue during XII Five Year Plan (2012-2017) and beyond based on evaluation of its performance.

## 8. Financial implications: Total cost of the project over the proposed period:

The  estimated  outlay  of  the  scheme  approved  by  the  cabinet  is  Rs.967.28  crore  as  Central Government's share and in addition, States will share an amount of Rs.249.50 crore towards capital and revenue expenditure.

## 9. Miscellaneous:

Ministry of Tribal Affairs in consultation with Ministry of Finance and Planning Commission may effect changes in the scheme guidelines, other than those affecting the financing pattern as the scheme progress, if such changes are considered necessary.

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