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In a particular season, price of Mahua is
at its lowest in the initial collection period April - May.
This is also the period when people do not have any alternate
source of income and are desperate to sell. The price rises
with the progressing harvesting season. Usually the price
of Mahua in April - May is Rs. 1 - 3 lower then prices in
June - July. However, primary collectors are unable to take
advantage of this due to their desperation to sell.
Policy and its Impact
Mahua has always been controlled by the state
excise laws except for a brief period when it was nationalised.
The excise department issues permits for collection and storage
by charging a nominal license fees.
Mahua was nationalised in April 1991 to find outlets for its
utilization as distilled liquor was banned in Orissa in 1990.
TDCC and OFDC were entrusted to trade Mahua from April 1991.
The corporation without undertaking detailed study on viability
of the trade and also without exploring market linkages entered
into the trade. The government fixed the purchase price at
Rs. 3 per KG in the first year. However the prices ruled at
Rs. 1 in the neighbouring state of Bihar (present Jharkhand).
The government agencies were saddled with Mahua from the neighbouring
state in addition to the production inside the state. But
then ultimately it had to be sold in the Ranchi market. The
agencies had to resort to distress sale at Rs. 0.5 to 1 a
KG, while the total cost came to Rs. 5 including overheads.
A substantial amount ended up as mere waste to save the government
agencies storage cost. TDCC and OFDC sustained losses of Rs.
9 and Rs. 20 crores respectively. The only gainers were the
agents who bought Mahua in Bihar and sold off in Orissa due
to the price difference.
The situation was back to where it was earlier.
Mahua procurement and trading again came under existing excise
law from March 1992. Licenses were to be issued accordingly
by the excise department for collection as well as trading
as was being done previously. It is the private entrepreneurs
who have been controlling the trade since years. Although
government fixes the price of Mahua, primary collectors are
forced to sell Mahua flowers at a lower price as nationalisation
reduced the number of legal buyers. There is an additional
tax on the produce. This is reason enough for the traders
to trade the produce through illegal means. Most Mahua flowers
are exported to Jharkhand and Chhatisgarh illegally.
Post March 2000 no significant change has
been observed in the ground realities with regard to Mahua.
Though the ownership rights was transferred to the Panchayat,
the Excise Department still continues to hold control over
the licensing and hence it is only a very few powerful private
players with big financial muscle who control the trade.
Trade route
Ranchi is the most important market for Mahua
flowers. It is the node of the traders' cartel where prices
are fixed and produces move only after getting a signal from
the city. Though, Mahua also goes to undivided MP and Maharastra
from Orissa, the hold of Ranchi cartel is complete.
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