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Orissa Forest Development
Corporation (OFDC)
Orissa Forest Corporation Limited was started
in September 1962 as the first public sector undertaking in
the forestry sector of the country with an authorised capital
of Rs. 2 crores. The corporation had the following objectives
to achieve.
- To undertake scientific management and
harvesting of forest resources and to carry on business
on various forest produce so as to generate maximum financial
resource for the state.
- To plant, grow, cultivate, propagate,
produce and raise plantations of all kinds including commercial
and horticultural crops and to market there from.
- To encourage and establish forest based
industries.
- To generate more employment, particularly
in rural sector and to elevate the socio-economic condition
of the rural mass, especially tribal.
The corporation started functioning from October
1962 to trade in timber, firewood, and other products. The
primary reason was to increase the revenue of the government.
This was conceived as the commercial arm of the Forest Department.
Subsequently it took up trading of Kendu Leaves in 1965-66
and Sal seeds from 1973-74.
Following nationalisation of KL and Sal seed
in 1973 and 1983 respectively, the Corporation became the
sole selling agent of Kendu Leaves and the important procurer
of Sal seeds from major part of the state. By 1987-88 the
Corporation was in a position to pay annually about Rs. 48
crores to the state exchequer as royalty out of its total
turnover of Rs 80 crores. With the merger of two more corporations
namely the Simlipahada Forest Development Corporation Ltd.,
and the Orissa Plantation Development Corporation Ltd. in
1990, Orissa Forest Corporation was renamed as Orissa Forest
Development Corporation Ltd. Later in 1991 the Orissa Composite
Board Ltd. was also merged with it.
Since the green felling has been banned in
the state OFDC is not able to harvest timber and firewood.
It undertakes the salvage operation for collection of dead
and fallen trees/wood. Now the major activities for the corporation
are Kendu Leaf operation and trade, harvesting of bamboo and
supply them to paper mills, and procurement and sale of Sal
seed. During the previous monopoly lease system, the corporation
was also dealing with MFP such as Nux vomica, Siali leaves,
honey, resin, arrowroot, Harida, Behada, Sabai grass etc.
In case of Kendu leaves, it finances the procurement operation
and takes the responsibility of marketing. OFDC along with
TDCC is the appointed agent of GoO for procurement and trading
of Sal seed. But in case of bamboo, it is the sole authorised
agent on behalf of the government to do harvesting and trading.
Because of the increased royalty for the last two years bamboo
operations could not be undertaken as the paper mills refused
to procure bamboo from OFDC. These paper mills went for hardwood
and also import of bamboo from Assam and other places. This
year the royalty structure has been reworked and the paper
mills have agreed to procure bamboo from OFDC and the corporation
has already started the harvesting operation.
As the major revenue comes from Kendu Leaf,
the corporation does not take interest in other NTFP. It also
is in financial crisis and strives hard for restructuring.
Like TDCC it does not emphasise much on market promotion,
research and development for NTFP.
Orissa Rural Marketing
Society (ORMAS)
ORMAS was created by the state government
in 1989 as an autonomous agency under the Department of Panchayat
Raj. It is mandated to create an institutional outlet at various
levels for marketing rural produces at a remunerative price.
It is also meant to play a leading role in mobilisation and
organisation of the unorganised rural poor for livelihoods
purposes by formation of groups, imparting of new skills and
upgrading existing skills and help in the process of creation
of a trained reservoir of man power in rural areas. ORMAS
aims at bridging the critical gap in the chain from production
to marketing especially for the beneficiaries of Integrated
Rural Development Programme (IRDP).
During last few years ORMAS has launched a
number of initiatives to fulfil its mandate. It has set up
District Supply and Marketing Societies (DSMS) in all districts.
It has organised a number of fairs and exhibitions in the
state and also has participated in similar fairs and exhibitions
organised by CAPART to give a boost in particular to the income
of the rural artisans and DWCRA groups. One of the important
contributions of ORMAS in tribal Development is to assist
members of DWCRA and other self help groups in marketing the
NTFP that they collect from the nearby forests including sincere
endeavour for value addition through preliminary processing
of the produce at their doorsteps. With the assistance of
the government it implements the Special Swarnajayanti Gram
Swarojgar Yojana (SGSY) in different districts to help SHGs
in setting up small enterprises based on NTFP and agricultural
produces. It has been playing vital role in processing and
marketing of hill broom, leaf plates (both Sal and Siali)
etc.
Utkal Forest Products Limited
(UFPL)
Utkal Forest Products Ltd. started as a joint
venture project of GoO and a private entrepreneur, Mr. Jagdish
Lath. IPICOL, as the state agency had invested Rs. 115 Lakhs,
(loan - Rs. 67.04 Lakhs and Equity - Rs. 48 Lakhs) which was
disbursed in March 1991. Utkal Forest Products Ltd was given
a decade long lease of 32 (subsequently 28 and 18) NTFP. The
three major features of its long-term lease were captive processing,
royalty and security, and fair price to primary collectors.
One of the conditions of the lease agreement was that UFPL
Ltd would procure at least thrice times more than what was
being procured in the previous year. It was also mentioned
that the lease would be cancelled if the above condition is
not met and revenue is not submitted accordingly.
However, things turned out to be different
then planned. Let alone meeting these lease conditions, UFPL
surrendered 10 items within 5 years of the commencement of
lease period. There is no other evidence of the company getting
involved in processing, except one with unfavourable results
again. Utkal Oil, a processing outfit of UFPL got into a buyback
agreement with TRIFED that would have collected processed
NTFP. Supposedly, to the ignorance of TRIFED, Utkal Oil had
by then achieved the distinction of a loss-making unit and
had been taken over by the Board of Industrial and Financial
Reconstruction.
The govt never had any figure regarding its
operational area, volume of procurement and the payment it
makes to people. Even senior level forest officials complained
that since UFPL Ltd was allowed to operate in a coup permit
throughout Orissa, there was no departmental control and hence,
the ignorance regarding its volume of procurement. According
to the Forest Department the company paid royalty only up
to 1993. The company took another short loan from IPICOL in
1996 to prepare Gallic acid from Banachakunda seeds. Nobody
knows what happened to the project. The loan, royalty and
security, and the interest default in simple calculation goes
beyond ten crores.
In an instance in 1997 the amount sold to
TRIFED by UFP was much more than what was shown to the Govt.
for royalty calculation. Moreover, despite an assembly question
on the amount of outstanding royalty (approx. Rs. 55 lakhs)
on UFPL in 1997-98, no punitive action was taken. The Govt.
in 1998-99 finally announced that the royalty default in the
name of UFPL Ltd. is to the tune of Rs. 81.58 Lakhs. The Govt.
apparently served a show cause giving a month notice when
the company did not respond to a deadline fixed by the Govt.
Though the Govt. formed a House Committee to probe non-payment
of the royalty, it did not mention the basis on which the
said royalty was calculated because according to unofficial
sources, the royalty due was in tune of some crores.
Besides, according to the conditions enumerated in the lease
document TDCC was to procure in case the joint sector company
refuses. But immediately after surrender of the 10 items in
1995, the Govt. came out with an order, which authorised the
local DFOs to sale 10 items through public auction that neither
supports the cause of tribals nor contributes to the State
exchequer.
What surprised the people who have observed
the operations of UFPL is that despite so many clever manoeuvres
and non-sticking to agreements, the company continued to operate
for so many years. Of course, things have changed with the
new policy and UFPL is now non operational. But what needs
to be noted is the amount of money that was actually invested
and lost apart from the potential loss that is difficult to
calculate.
As regards NTFP trading, the experience of
the State with Govt. Corporations like TDCC and Joint Sector
Companies like the Utkal Forest Products Ltd. has been awfully
frustrating. If TDCC has been a liability, UFPL Ltd. outsmarted
the State bureaucracy. Its hypnotic effects are such that
anything with regard to UFPL Ltd. is a well-guarded secret
in the department. It has not only caused heavy loss to the
state exchequer but has made mockery of the departmental knowledge
base through intellectual deception. For example, it has surrendered
products, which were never leased out to it and the Govt.
has smartly accepted the surrender. In 1995, it surrendered
Talamakhana whereas the lease was for Makhana seeds. Similarly,
if the inefficiency of TDCC has propped up the private business
houses and local middlemen into activity and profit, the emergence
of UFPL Ltd. has made the whole trade of NTFP fuzzy, unholy
and confused resulting in State’s loss of interest in
benevolent trading.
Agency Marketing Cooperative
Society (AMCS)
AMCS was initiated as a co-operative society
of turmeric growers in Phulbani. The society secured a lease
for some forest produces in 1950 and gradually came to control
all MFP in the undivided district. The society in its peak
had 53097 tribal members, 168 employees and share capital
of Rs. 22.78 Lakhs. Its activity included procurement, storage
and processing of forest produces as well as establishing
of retail outlets to sell the same. Once it was the biggest
trader of Siali leaf. The society also undertook welfare measures
like credit funds, training camps, cultural functions and
aid to colleges and high schools for tribals. It is the only
cooperative society that was making profit from trading of
NTFP and functioned relatively better in procurement of NTFP.
AMCS has become defunct because of several reasons. It has
been allegedly reported that the main reason for collapse
of such a profit earning cooperative was the leadership crisis
and also political intervention. After March 2000, it became
defunct and the members are suffering a lot selling their
forest and agricultural produces.
Kandhamal Apex Spices Association
for Marketing (KASAM)
KASAM is the apex society formed by sixty-one
Spices Development Societies in the tribal district of Kandhamal
with more than 10,000 farmers as primary members.
The objectives of KASAM are to
- create employment generation,
- alleviate poverty,
- extend the area of cultivation for spices
and enhance the production of quality and value added hygienic
spices,
- promote scientific farming of spices and
- set up viable marketing network by minimizing
the exploitation of traders through inculcating a feeling
of self confidence and self reliance among the people.
The programme was initiated in Oct. 1, 1995
under Innovative Jawahar Rozgar Yojana (IJRY) scheme of the
government. It is currently working in 5 blocks of Kandhamal,
namely, Phiringia, Raikia, G.Udaygiri, Daringbadi and K.Nuagaon.
In the first phase 5 societies were started and now there
are 61 societies.
GOI supported 80% of total funding and the rest 20% came from
the State Panchayati Raj Dept through DRDA. A part of working
capital was raised through grant in aid and the rest as contribution
from the members. The grant was given under the condition
that the members would follow the guiding principles of KASAM.
The organization has started marketing of
organic spices in a big way under the brand name “Kandhamal”.
It has developed infrastructure for production and supply
of value added spices. KASAM also deals with tamarind. It
purchases tamarind from primary collectors at rates fixed
by the govt. Then it is processed, where mostly the primary
collectors are employed. The primary collectors are also encouraged
to process tamarind themselves and sell the same at high prices.
All the spices of Kandhamal are Organic in
nature. The tribal farmers are traditionally organic growers
and the spices are grown without fertilizer and pesticides
use. Skal, a certifying agency of Holland has been engaged
for certification and issue of organic certificate. The major
buyers of KASAM are OMFED, Aryan International, New Delhi,
Rosy Traders, Berhampur, Gautam Export Corporation, Berhampur,
and ABC International, Bangalore.
Issues faced by KASAM
KASAM is too facing problems in marketing
of spices as well as tamarind. It is now exploring other potentiality
for value addition so that the produces could be exported.
Tribal Cooperative Marketing Development
Federation (TRIFED)
TRIFED was set up under the Ministry of Social
Welfare in 1987 under the multi State Cooperatives Societies
Act, 1984. The need for a Central Apex Level Federation like
TRIFED was long felt and was also recommended in successive
meetings and conferences and also by working group on development
of schedule tribes during the sixth and seventh plan period.
The Government of India accepted the recommendation of the
working group and set up the TRIFED as an apex body at the
National level of the State level Tribal Development Corporations,
Forest Development Corporations and other such State bodies.
Objectives
- Full utilization of natural resources of
tribal areas by improving their marketability
- Higher earning and employment opportunities
for the tribal people
- Creation of awareness regarding the market
forces among the tribal people to enable them to optimise
their income
- Marketing support to the State Tribal Cooperation
and Forest Corporations engaged in such activities
The basic objective is to support the state
cooperatives and corporations by finding proper market for
NTFP and SAPs collected or harvested by tribal, and to train
them on scientific collection of produces. In Orissa, it does
not operate as a direct lessee but as a marketing agency for
them. For example, TDCC before commencement of every crop
year gets into an agreement with TRIFED for forward sale of
a few products.
TRIFED neither has been able to train tribal
people on scientific collections of various items of forest
produce nor has it taken steps for strengthening of LAMPS
so that these become viable collection agencies. Though the
number of NTFP it is trading has increased no substantial
increase has been observed in payment of purchase price and
also in the volume of trade.
Gram Panchayat
After the March 2000 NTFP policy Gram Panchayat
emerged as another institution to own, control and manage
a majority of NTFP (68 items), which has been discussed in
the chapter 2. Although GPs are not supposed to undertake
the trade they would control the entire trade in their area.
They would work towards establishing community based management
of NTFP i.e. empowering Gram Sabhas to collect, process, storage
and market the NTFP available in their area. If the GPs are
interested they can also directly get involved in the trade.
In few cases it was found that the Panchayat Secretaries have
taken interest to contact the traders and directly involved
in collection and marketing of some NTFP. GPs now can tie
up with TDCC, ORMAS, TRIFED etc for marketing of NTFP and
at the same time work collectively with the Forest Protection
Committees, VSSs, SHGs etc for collection and processing of
NTFP at the village and panchayat level. GPs are going to
be the large number of decentralised institutions in Orissa
to control and manage the trading of NTFP. More than 2000
GPs in Schedule V areas can play effective role in management
and trade of NTFP.
Now Panchayat Samitis have been empowered
to fix up and regulate prices for NTFP, which are controlled
by GPs.
Private companies, individuals
etc
Although there are number legal institutions
to manage and trade NTFP the reality is something different.
The trade is virtually controlled by the private traders,
entrepreneurs, corporate houses. They really fix up the procurement
prices for different items. They decide which NTFP are to
be procured and which are not to be. They have their own informal
networks to procure the produces and trade it in different
mandis. The trade channels are being discussed in the next
chapter. The past experience shows that no regulatory mechanism
have successfully controlled the private trade or illegal
trade of NTFP in the state.
Community based NTFP management
and trading
The state has failed to support the cause
of primary collectors by first restricting their access to
market and then completely washing its hand off. Lately, it
is being widely realised and debated in different fora how
the revenue-friendly policy has generously contributed to
marginalisation of tribal. One of the formidable depriving
factors for a primary collector is his/her inability to find
and penetrate the market. Though the Govt. had vouched for
policy and institutional support for access to market but
nothing in that direction could be realised in reality. Even
in hey days of monopoly with restricted trade, there were
individuals, groups and institutions who at their own levels
went all out to explore markets which hold the key to self-reliance.
Some directly challenged the existing trade arrangement with
a demand to function as parallel market securing agencies.
Some others have played a support and facilitating role by
providing relevant market information to primary collectors
and their co-operatives. These interventions could be seen
as direct and indirect ones both aiming at better prices and
eventually better market for primary collectors.
Few organisations of the communities/people,
who played very significant role in creating alternative markets
may be at a very low level are Mandibisi Mahila Samiti of
Kashipur in Rayagada, Banashri Mahila Samiti of Thuamul Rampur
and Lanjigarh in Kalahandi, Deomali Mahila Samiti of Semiliguda,
Jangal Surakhya Parishad of Gollur, Nandpur in Koraput, Basudha
Vikas Samiti of Suliamal, Patnagarh in Bolangir district.
They have challenged the authority of institutions trading
in NTFP and fought with the traders to raise the prices and
also explored markets in neighbouring states. In the district
of Mayurbhanj many villages have formed their cooperatives
to prepare sal leaf plates and cups, and they have a strong
presence in the market. It is being told by the traders that
about 25 lakh people are involved in collection and stitching
of sal leafs and cups.
SHGs have now emerged as important institutions
to collect, process and market NTFP and they are more interested
towards NTFP like brooms, tamarind, amla, leaf plates and
cups, oil seeds etc. Financial institutions are extending
their support to these SHGs for value addition and marketing.
ORMAS has support a number of SHGs in Western and Southern
Orissa to process sal and siali leaf, brooms, tamarind, amla
etc. If market could be assured to these institutions then
the community based management of NTFP is not going to a difficult
task ahead.
Similarly the networks of forest protecting groups at the
cluster and district level in 5-6 districts are showing great
interest in market promotion for NTFP. They have initiated
a collective bargaining process for fair prices and also trying
to explore alternative markets.
Some of the NGOs who have been actively into
the management of NTFP are Agragamee, Wida, RCDC, Vasundhara,
Pragati, Antyodaya, Srustri etc. They have been challenging
the policies of the government to make them more pro-poor
and create conducive environment for trade, wherein the primary
collector would get fair wages for his/her labour. These NGOs
are providing market/trade related information to the community
based organisations, networks of forest protecting groups,
Gram Panchayats etc. Some of these NGOs are working with TDCC,
ORMAS and TRIFED to help them in value addition and procurement
of selected NTFP. Some of them are currently undertaking studies
to find alternative markets for the NTFP in other states.
For the nationalised NTFP like Kendu Leaf, Sal seed and Bamboo
these NGOs have been fighting with the government for more
decentralisation and proper sharing of profit/revenue with
the primary collectors.
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