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Chhatisgarh State MFP Federation

Trading of nationalised produces was done as a royalty system in one form or other from 1964 till 1984. Due to problem in the system and in order to give more benefits to forest dwellers in collection and trade of Tendu Leaves, MP State Minor Forest Produce (Trading & Development) Co-operative Federation Limited was formed in 1984. The federation operated in a limited way through PACS and LAMPS till 1989, when a three tier Co-operative structure was designed and implemented to deal with nationalised produces by obliterating role of middlemen in trade.

MP State Minor Forest Produce Federation was placed at apex level of this structure. At primary level, Forest Produce Co-operative Societies (PCS) were constituted. At intermediary level, District Forest Produce Co-operative Unions were formed. 1947 PCS and 44 district union were formed in 1989. Later district unions were organised as per territorial divisional units and there were 83 district unions prior to division of the state. After division, Chhatisgarh MFP Federation came into being in October 2000. At present, Chhatisgarh has 894 PCS and 32 district unions. The new state has over 9, 37,000 members and 10000 phads become operational during TL season.

Primary co-operative societies are formed with the membership of actual pluckers. The societies have elected members and an elected chairman. A management committee comprising of chairman, manager and other members manage its day-to-day affairs. First election to the primary co-operative societies was done in 1995 and the next was done towards the end of 2001. Prior to elections in district unions, the collector used to be the chairman and territorial DFO ex-officio managing director of district union. While the later still holds the post, the unions now have elected chairmen. Conservators at circle level are designated as General Manager in the federation.

As regards to administration of collection, each of the Phad has a phad Munshi and each PCS a Manager. The district union has minimal staff (2 to 3), most of the fieldwork being done by the regular staff of forest department. The federation does not have any office except at central level. The district union office is attached with the territorial forest division office, as DFO is the MD of the Union. The federation has a separate office in the state capital. In total the state federation has about 150 staff on its rolls. All the federation staffs are on deputation from FD.

For expenses, PCS received a commission @ Rs. 10 per SB, but total amount was not to be less then 3% of sale amount. District unions were paid @ Rs. 3 per SB that was not to be less then 1% of total sale received. Federation received a commission of 2% on sale amount received by sale of leaves in the whole state. Later the government reduced commission of state federation and district union to Rs. 1 per annum undertaking to bear the expenses of federation and district unions. In realty this was done so that government could take away bulk of the net receipts as royalty. However things again changed after enactment of PESA, when government had to plough back all the receipts to people.

The federation now also trades non-nationalised produces in a limited way. In this case, proposals are sought from willing PCS and loans advanced to deserving societies at 4% per annum interest for working capital. Though federation and district union extend all possible help in sale of produces procured, it does not guarantee anything and does not bear any risk.

It is also in this context that a task force was established in 1995 for promotion of medicinal and aromatic plants in the state looking at potential of the state. It has made efforts towards popularising plantation of medicinal plants among rural population and marketing them. After division of the state, the present chief minister has declared Chhatisgarh as an herbal state and it is expected that the new state will hasten process of promotion of medicinal plants thereby ensuring its protection and sustainable harvesting along with trading.

Sale

All produces were till recently sold on auction/tender after collection. However, there has been a shift towards advance tendering in all produces except for Tendu leaf. This is being done as per 73rd amendment or PESA according to the official position so that primary gatherers get maximum benefit. While the federation and district union play the facilitator's role, the trader collects the produce from primary co-operative societies. The advantage is that rates of sale will be known in advance and accordingly benefits passed on to collectors directly; there is also less scope for corruption and lesser expenses on storage. Administrative expenses of the federation will reduce significantly in the process. Even in case of TL, Chhatisgarh MFP federation in some divisions is trying advance tender system, as has been discussed earlier.

However the system is not without problems. This system also ensures that the federation's risk is now transferred to the traders. This indirectly implies that the federation also foregoes its responsibility to collect all the produces available with primary collectors. The traders also benefit from the system as part of the procurement can be done through illegal means by under reporting of quantity or underpayment to collectors.

The federation feels that following increase in prices have been possible primarily due to advance tendering system. However, there has been reduction of prices in Harra and Gums post 2000.

 

Table: Procurement Price Paid by MFP Federation in 1999 and 2000

Produce Rates for 1999
(Rs. Per Quintal)
Rates for 2000
(Rs. Per Quintal)
Harra 300 550
Kacharia 400 700
Balharra 500 900
Kullu Gum 3000 5000
Salai 2000 3000
Other Gums 3000 3500-4500
Sal seeds 300 300
Green Amla - 250-540
Mahua Seed gully - 550-600
Chironji - 2500-3500

Source: MPMFP Federation Website

The federation makes huge profit from TL operations. The federation at the same time claims that it usually incurs losses in other produces. However figures suggest that it also makes profit in all other produces (refer annexures on individual produces expenditure and income), though not in the scale as in case of TL. The margins are definitely less, and have become uncertain in recent periods (Harra is a case in point). Could this also be a reason for advance tendering?

There are allegations that federation is not procuring Harra in most areas. It also does not give much importance to procurement of Sal seed. In the case of former, reason given is that the federation is helpless as the market is dull and it is not able to clear the previous years' stock.
There is a provision for grievance redressal, in which case collectors and traders can formally lodge complaints from level of Ranger to PCCF.

Incentive Wages

One of the major changes effected in the undivided state in response to 73rd amendment (PESA) have been in distribution of incentive wages. Since the provision bestows ownership of NTFP to Gram Sabhas, it was decided that all net receipt from operations of TL would be distributed to primary co-operative societies. Societies in turn would distribute the profit as follows -

  • 50% - as incentive wages to the members directly
  • 20% - to be spent towards development of forests and NTFP resources. The fund for PPA comes from this 20%.
  • 30% - ordinarily to be spent in basic infrastructure development of respective area and can be given to the members directly if the society so wishes. It has been decided to construct godowns in the leaf growing areas so as to increase storage capacity that in turn would enhance collection of the leaves thereby increasing income to pluckers.

The incentive wages for the year 1998 was distributed in May 2000 with much fanfare with prominent state and central congress leaders distributing it in different districts.

After creation of the state of Chhatisgarh, the new state has decided that the above ratio will be 70:15:15.

Other positive developments

Though it could not be verified, some of the steps initiated or proposed imply that the state has forward-looking policies in place. A case in point is the stipulation proposed - that 50% of phad Munshis have to be women. The Phad Munshi also has to make arrangements for crèche facility and drinking water for women and pluckers. The federation has also constructed a number of godowns in TL producing areas out of allocated 30% net income.

Imli Andolan (Van Dhan Samiti) in Bastar

Tribal Trade of NTFP in Bastar

During collection season of NTFP, men folk usually roam forests for a few days at a stretch in groups of 5 - 10 gathering NTFP, while women tend homes. Women venture out to gather NTFP that can be collected nearer home so that they are back during afternoon. After return of men from forest, women normally take care of produce by engaging in activities from sorting and cleaning to taking to weekly haats for selling. They would measure and take out quantity they require to sell at a time, depending on need. Women in groups carry head loads all the way to market, which could be as far away as 20 - 30 km.

Once in haat, they explore the market to get an idea of rates first by selling low quantities. Apart from prices that are anyway low in comparison to the retail markets, the traders cheat on the weight. The group of women would aggregate to share their findings and then proceed to sell head loads to a particular buyer who they deem to be fairest. They rarely display loyalties to any particular buyer with whom they would associate every market day. Besides fairness, the yardstick they use to determine whom to sell to is availability of necessary goods under same cover. Being not very comfortable with handling currency notes and out of habit they prefer to finish both selling and buying at least number of shops. This would save them of harassment of having to deal and bargain with more people as well as save time enough to relax and socialise before resuming journeys back home.

Sometime traders force village women to off load their produces by snatching their goods or pulling them. The women folk usually do not resist such actions.

The forest produce is also sold to traders who come to villages or to village shopkeepers. The itinerant traders or kutchias put up their shops in markets and also tour villages in search of NTFP. They often share personal relations with tribal - either filial or commercial- that provide them the push to visit tribal at their homes. Besides kutchias employ emotional campaigns to get villagers to dump forest produce with them. Their constant contact with tribal familiarise them to domestic situations of each of the families. Being moneyed class in the villages they often chip in with aid, monetary or otherwise, when tribal are in need. By providing tribal a variety of services they manage to endear themselves and earn a livelihood.

Tribal remain in their villages during paddy crop and Tamarind season, when they work from their homes. During these days, they earn about Rs. 20 - 25 a day if someone else employs them. During other times, when they are out in forests for few days, they mostly survive on food available in the wilds. And the stays in forest are not at cost of any other income source, as there are hardly any. Therefore the tribal visit to forests is a source of income for their families, as they bring back commodities that will sell, without a drain on resources of the family. At the same time, it is very difficult to ascertain the kind of income tribal derive during course of a week, from their stay away and sale of gathered produce at a later stage in absence of any fixed or assured returns for produces collected.

Imli Aandolan (Van Dhan Samiti)

In light of above, the local district administration decided to intervene in NTFP trade in the year 1999 as part of a larger role envisaged in overall social, economical and ecological development of one of the economically backward region of the country. Imli or Tamarind was chosen as the entry point produce due to its importance in the tribal economy and that's how the intervention came to be known as Imli Andolan.

The government intervention did away with middlemen at Bastar level. Van Dhan Samitis (VDS) formed under Panchayati Raj act purchased forest produce from villages, haats and bazaars. Unregistered traders who had been traditionally attending markets were banned. Laws banning trade in forest produce by non-tribal outside Mandis was enforced despite opposition by traders. The traders even tried to influence at political levels and procured produces illegally.

To start with, three types of Samities were entitled to operate in bazaars and haats. Each panchayat had one Samiti formed and ratified by gram Sabha and registered with block panchayat. They had their bank accounts into which the block panchayat transferred money, which it used to make purchases at haats. The block panchayats receive money from zilla panchayat that in turn is funded by TRIFED. The second variety of VDS were the Van Surakhya Samities formed under aegis of forest department. The fund FD received from TRIFED got channelised through range offices to FPCs. The last kind of Samities was the LAMPS and other smaller co-operative societies of co-operative department. The RRBs and co-op banks funded their operations, which in turn got money from TRIFED.

These Samities collected goods by visiting a few markets during the week and then deposited them to nearest TRIFED collection centres from where it was transported to godowns and cold storages in Jagdalpur. Systems were evolved to ensure smooth transfer of goods and cash from and to VDSs. TRIFED took the responsibility of marketing the produces so procured. During the peak time, TRIFED was procuring 70 items that included the important surplus agricultural produces of the region as well, apart from NTFP.

Legal Aspects

In order to protect the tribal from exploitation, the district authorities in Bastar, came out with a novel design with strict ensuring and monitoring mechanisms. The business in minor forest produce transacted in hat-markets and Mandis is around Rs. 500 crores, in a year. In this district, 90% of the producers live in rural areas and the entire business transaction takes place in 220 hat-markets. The district authorities by holding "confidence camps" in hat-markets, detected certain aberrations like low payment to primary producers, cheating in weighing, unequal modes of exchanges etc. They unanimously decided that exploitation of adivasis has to stop immediately and action to be taken under Mandi Regulations, Adivasis exploitation Regulations and Rule 420 and 120(b) of Indian Penal Code.

Accordingly to the provisions of Madhya Pradesh Agricultural Produce Mandi Regulations, minor forest produce can be purchased in agricultural produce Mandis and sub-Mandis or stockyards in accordance with prescribed business transaction procedure. The forest department only on the basis of the sale-purchase declaration issued by the Mandi can issue transit permits. Similarly, Adivasi exploitation Regulations empowers the adivasi to file a first information report with the police against the alleged exploiter. According to Rules 420 and 120(b) of IPC, an office of the Regulatory authority can file a first information report with the police for any exploitation that may have taken place in his present.

Transit Permits could be issued for tamarind purchased by traders from Mandis or sub-Mandis. The concerned field officers of the forest department can issue such permits after securing permission from the Divisional Forest Officers/ Range Officers. If any person applies for issue of Transit Permit for tamarind collected illegally, then forest department officials would inform the Mandi Secretary who can take steps for seizure etc of goods. Steps can also be taken for confiscation of the vehicle used in illegal transport. The Sub-divisional officer (Sub-Collector) or the Tehsildars was made the empowered officer of the mandi. The empowered officers were expected to study the provisions of the Regulations and ensure adherence to the procedures prescribed therein. The Divisional Forest Officers/ Range Officers engaged special police in hat-markets to deal with market barriers. Besides, each market had a nominated officer. The nominated officer ensured purchase of tamarind and other minor forest produce in the hat-markets according to the procedure.

Institutional Mechanisms in Imli Andolan

District Administration

The collector's office acted as an influencing, motivating institution due to qualities of the incumbent, and pushed officials at lower level to act. It co-ordinated with various departments and ensured that the machinery performs. It sought regular reports from lower levels and had set up information systems. The collector personally oversaw the operations ensuring that proper prices were paid and proper practices followed, that the finances and collection facilities reach on time and also determined future course of action. The block officials ensured that markets were monitored and funds utilised properly. Their presence in bazaars provided Samities the required confidence to carry on operations and act as deterrent for anti social elements.

TRIFED

The financier and marketer of operations was TRIFED. Its role was to provide platform for effective marketing of tribal produce. It provided infrastructure and support for effective procurement, storage and marketing of forest produce. TRIFED's network of collection centres aggregated the produce and transported it to storage locations. Its presence in markets, with staff and infrastructure, provided backbone for the operations. At the same time, TRIFED was also involved in distribution of essential commodities to tribal.

Rajiv Gandhi Mission

The development mission was a proponent of the operations and its role important to relieve district administration partly of its responsibilities. It undertook extension activities and enlightened tribal about the new system and served as an effective feedback mechanism for planners through its education programmes.

Apex Committee - Pricing

The apex committee under leadership of collector met every Saturday to monitor performance and operations over the past week, decided on prices and commissions and planned for future. The committee had as its members, heads of departments of all concerned and other bodies like TRIFED, Rajiv Gandhi Mission, and FD.

OILFED/ SILKFED.

OILFED and SILKFED's role were diluted with procurement by TRIFED, who had sole marketing rights. Under such circumstances, their roles were reduced to bare minimum with some of their facilities being used off and on. But these organisations could have been vital sources for technical know how, training and R& D inputs.
What happened later?

TRIFED stopped procuring from VDS in May 2001. The prices of Tamarind immediately crashed to Rs. 1 - 1.50 a Kg. The movement seemed to have taken a halt, if not completely stopped. Approach of district administration, though benevolent and genuine, remained top - down and the tempo was difficult to sustain in absence of any alternative mechanisms as it was the collector and district level staff who drove the effort. Even Panchayat institutions played a very marginal role in this intervention.

There was a market slump in 2001 that affected tamarind trade, prices touched rock bottom, but TRIFED was unable to match those prices. Though it was procuring, it was unable to sell at the same prices. When it stopped procurement in May 2001, it had 25000 MT of seeded tamarind at various godowns. (In April 2002, it still had stock of nearly 17000 MT for which it was incurring Rs. 60 per MT a month as storage cost) TRIFED was serving with makeshift staff and storage facilities. It required finance and commitment of the top brass to concretise the system. The officials and staff were not very sure of its role and plans for future.

Not all VDS were holy cows. Some never attended markets regularly and sat over funds that locked up substantial amount of capital. Besides those attending markets did not often meet break-even volumes that would have encouraged them becoming regular. TRIFED paid them commission for procurement, for incurring incidental expenses of attending markets such as refreshments, packing, weighing and transportation as well as to serve as a benefit of members. This commission was declared by apex committee and did not suffice in case of all Samitis all the time. Besides most markets were not known to witness heavy selling of forest produce through out the year. In such cases sustainability of Samitis operating in these areas during off - seasons became a problem. This proved a stumbling block towards institutionalising Samitis as a regular feature in Bastar Markets.
Traders who initially opposed the movement found ways and means to make profit out of the arrangement. They either got into committees themselves or influenced the members by virtue of their superior knowledge in the trade. They got produces from neighbouring states (notably Orissa) and made profit out of the difference in prices.

In 2002, TRIFED has not procured any item till April. However it wishes to procure oilseeds and pulses as a price support agency.

As an Afterthought

What could have happened in case the government, state or central, had supported TRIFED in extending its services as price support agency. Various facts and figures with some assumptions suggest that it could have worked. Like after a disastrous 2001, prices have recovered in 2002. Prices at village level were floating around Rs. 4- 5 a Kg of Tamarind. Some say this is a positive fall out of the movement, though it has stopped. Others however feel that after 3 years (1999 - 2001) of increasing trend of Tamarind production, this is the trough year for production. Hence even TRIFED is hopeful of disposing all its produces this year. So if the government takes care of the crunch situations in terms of providing working capital, TRIFED could actually work as a price support agency and still work at the least as a no profit no loss agency.

But this question has become incorrect politically where tribal community does not have any voice and withdrawal of subsidy is the order of the day.

 

 
 
 
 
Regional Centre For Development Cooperation