Policies governing NTFP

The use of term NTFP is a recent phenomenon in Orissa and till now some of the government records mention them as Minor Forest Produces because of their low revenue contribution. After independence there was inadequate emphasis on the control and management of NTFP excepting bamboo, kendu leaf and sal seed. In 1940s and 50s bamboo was directly harvested by the private companies. In 1960s government started Orissa Forest Corporation to harvest and manage bamboo, which was supplied to the paper mills on a much subsidised rates. This system continued till 1990 even after nationalisation of bamboo in 1988. The paper mills were virtually harvesting bamboo from the forest under the guidance of the Corporation. After the National Forest Policy 1988 these companies were engaged as raw materials procurers as they can't harvest directly. Now the Orissa Forest Development Corporation (OFDC - emerged out of merger of 4 corporations including Orissa Forest Corporation) is directly managing bamboo and the paper mills are no more interested in bamboo as they have shifted to hardwoods and other alternatives. Similarly kendu leaves were brought under strict state control in 1973 and prior to that it was managed under monopoly leases to few traders. Sal seed, which was not given any importance during 1950s and 1960s, was nationalised in 1983. During 1970s it was leased out to private oil mills by the Forest Corporation. Currently it is under the government control managed by Forest Development Corporation and Tribal Development Cooperative Corporation (TDCC). Rest other MFP/NTFP were not being managed properly till 1990. Based on the demand, some of the produces were leased out to private parties for trade. The situation was neither a free market scenario nor exclusively managed and controlled by the government.

With growing commercial importance of NTFP, many states started nationalising major NTFP presumably to protect tribal interest as against business ones. Simultaneously with the coming up of Orissa Forest Produce (Control of Trade) Act, 1981, state monopoly was created for control and regulation of trade in certain forest produces with the ostensible intention of protecting tribal interest and revenue generation. Besides, the state was also empowered to notify all other produces as Specified Forest Produce from time to time. These products even when found on private lands and on non-forest commons were treated as specified. This implied that the State not only enjoyed a monopoly over Specified Forest Products (or Nationalised Products), such as Kendu leaves, Sal seeds and Bamboo but also over all such produces which were declared so in various points of time. This in effect enabled the state to exercise monopoly over trade of almost all NTFP. This was done through practice of granting exclusive rights for collection of these NTFP to TDCC, OFDC, Co-operatives like Agency Marketing Co-operative Society (AMCS) and many others, Joint Sector Companies like Utkal Forest Products Ltd (UFPL) and a number of private business houses. The policies of various times ensured that no rights of forest dwellers are recognised but only as underpaid labour in the whole economy.

Definition of MFP/NTFP

Historically, NTFP was a collective name given to all forest produce other than timber. NTFP despite being such an important means of livelihood support has been left to varied interpretations according to common understanding and convenience. Till now no Acts, rules, policies or administrative reports have explicitly defined NTFP. Though Indian Forest Act, 1927 with its amendments continues to be the most important legal framework for the administration and management of forests, there is no mention of the term. Many resource agencies like Forest Research Institute (FRI) and Food and Agriculture Organisation (FAO) in their endeavour to define NTFP have ended up providing classification and documentation of NTFP without defining them. The FRI oversimplifies the term by saying that NTFP covers all forest produce other than major forest produce.

Timber in common parlance is understood to be a major forest produce. As there is ban on green felling now, questions have been raised regarding timber being a major forest produce because major and minor differentiation is perhaps created on the basis of revenue they generate. The 'Committee for Recommendations on Ownership Rights over Minor Forest Produce on Gram Sabha,' taking a fillip from MP government, defined NTFP as 'the forest produce other than timber, harvestable on a non-destructive basis.' Though this definition is an accepted one, still has its own limitation. It does not specifically say as to what is a non-destructive harvesting method and in the subtlest way relates it to the question of ownership.

MFP has not been defined in Orissa Forest Act of 1972 and Orissa Forest Produce (control of trade) Act of 1981. Prior to 1980, it was commonly understood that MFP means any forest produce other than timber, firewood and charcoal. In almost all the administrative reports of the govt. the above mentioned products are noted as major forest produce and others are described as MFP. In 1980, the Orissa Timber and Other Forest Produce Transit Rules was formulated that defined MFP as forest produce other than timber, firewood, charcoal and bamboo. But till date the records of FD mention bamboo as Minor Forest Produce. In the order relating to JFM on 30th September 1996 the government claims to have given 100 per cent usufruct rights to the Vana Sanrakshyana Samities constituted under JFM. People have right to collect, process, store NTFP but they have to sell these to the departmental agencies or lessees at the rate fixed by the government. Virtually the communities have no right to process and store NTFP.

The recent policy of the government that identified 85 NTFP, for the first time has made distinction between MFP and NTFP, though not specifically defined. The NTFP are divided into two categories namely, MFP and other NTFP. Forest produces like tamarind, honey, hill brooms, Siali leaves, Myrobolans and tree borne oilseed (TBOs) like Neem, Karanj, babul, Kusum etc. which come to 69 items are termed as MFP and have been kept under control of GPs. The other NTFP consist of two further sub-categories, nationalised produces and lease bar produces. Nationalised produces like Kendu leaves and bamboo are categorised as 'other-NTFP' and are directly controlled by Government. Moreover, certain items, namely Sal leaves, gums, resins and barks of different trees, climbers and roots of various species which have medicinal or other uses come under lease-barred items and are neither put to free trade nor are kept under control of GPs, as collection of these items on commercial scale will have adverse impact on the sustainability of particular species and forest.

NTFP Policy, December 1990

In one of the major milestones in the history of NTFP Policy, TDCC, AMCS and UFPL amongst themselves were given the leases to collect forest produces in different divisions. The following distribution would itself indicate the nature of policy making in the state of Orissa.

1. TDCC was given the exclusive right to 4 MFP items - Tamarind, Hill broom, Honey, and Mahua in all the 27 forest divisions of the state
2. UFPL, a joint sector company was given the exclusive right to collect 29 NTFP items in all the forest divisions of the state.
3. AMCS was given lease to operate in 3 divisions for all produces except the ones given to TDCC and UFPL.
4. TDCC was additionally given rights over all produces except those given to UFPL in 19 divisions.
5. OFDC was given rights over all produces in 5 divisions (not allocated to AMCS and TDCC) except those given to TDCC and UFPL.

While the above ensured that there was only one buyer for a produce in a division, there was no onus on the agencies to buy the produce collected by the primary gatherers. However, the illegal trade flourished due to various reasons as discussed in detail in the following pages.

NTFP policy of 2000

For quite sometime NTFP trade was monopolised mostly by private business houses that were granted lease on a long term basis to procure specific forest produces from specific forest divisions. Such monopoly trade arrangement created problems of low payment to tribal, erratic and arbitrary procurement, and revenue loss to the state. Therefore, in order to streamline the system of collection and disposal of NTFP, which are major source of livelihood of the rural poor, especially women, the State Govt came out with a new policy guideline on 31.03.2000. This gives ownership rights to the Gram Panchayat (village councils - lowest unit of local self-governance) not only in scheduled areas but also in the entire State. The policy had become over due after promulgation of PESA and subsequent state confirmatory act, Orissa Gram Panchayat Act in 1997.

The policy of March 2000 tried to regularise procurement and trade of NTFP as well as abolish monopoly lease in interest of proper price realisation by primary gatherers. However, the most prominent feature of the new policy is the transfer of ownership rights over MFP to Gram Panchayats (GP). This policy introduced many things for the first time. It is for the first time that the State Government recognised importance of MFP in forest dweller's life as well as demonstrated a strong political will to strike a balance between state revenue and protection of livelihood which in the past favoured the former. Secondly, it initiated a process of transfer of ownership over MFP from the FD to the GPs. Thirdly, it introduced multiple buyers doing away with monopoly trade arrangement that had restricted primary collectors' choice as regards sale, store and market. Fourthly, the policy decentralised and de-bureaucratised, as far as possible, the trading arrangements to encourage and motivate producer's co-operatives, primary groups, people's organisations to get into processing and trading at the local level.

With this, GPs were entrusted with the responsibility of facilitating and supervising MFP trade in their territorial jurisdiction, i.e., within the revenue boundary of the GPs. Business houses and Govt corporations who earlier controlled the trade would now operate as traders provided they get themselves registered with the concerned GPs as traders for particular MFP items for a particular season.

On 26th May 2000, Panchayat raj Department, in exercise of power under section 152 of the OGP Act, issued an administrative order prescribing the manner in which the rights transferred to the GPs shall be dealt with. Since royalty was withdrawn a token amount of Rs. 100/ was fixed as registration fee per each produce that is to be given to the GP in which the traders intend to procure. There is no restriction on the traders on number and volume of produces that they want to trade and transact provided they pay the registration fee. It specified the way registration would be done, keep a record of monthly transaction and most importantly the way the quasi-judicial power of reprimanding unscrupulous traders will be carried out. As per the policy, the GPs can not use their discretion in registering the traders though they can always reprimand unscrupulous ones involved in low payment, irregular procurement etc.

Other salient features of the Policy are -

• Abolition of royalty system
• Abolition of transit permit system inside the state
• In matters of collection, primary gatherers will be subject to reasonable control by the Divisional Forest Officer through imposition of temporary ban if collection method is found to be harmful.
• The DFO reserves the right to set a minimum target for procurement for respective items for the dealer(s).
• VSS will continue to enjoy rights of ownership over MFP and NTFP in reserve forest areas.
• After some uncertainty, it was decided that a district level committee would decide the prices of NTFP till the time PRIs were empowered to do the same.

Orissa Gram Panchayats (Minor Forest Produce Administration) Rules 2002

The state government made these rules in November 2002, which has following salient features.
· The GP shall have the power to regulate procurement and trading of MFP, whether produced in government lands and forest areas within the limits of Grama or collected from the Reserved Forests and brought into the Grama.

• Priority would be given to the VSS and its members for collection and trading of MFP.
• Price fixation would be done by the Panchayat Samiti (PS) in September and would be circulated to different offices of district administration and to all the GPs.
• The Gram Sabha would ratify prices fixed and necessary changes can be made based on the local needs.
• If Panchayat Samiti fails to fix the price then the District Collector would call a meeting of PS preferably in October to fix up the minimum procurement prices.
• The trader registered to procure MFP from the GP shall furnish monthly return and also annual return on a prescribed format.
• The GP shall furnish an annual return on the procurement and sale to the Forest Range Officer.
• In case of violation of payment of minimum procurement prices by the registered traders, the Sarapanch shall conduct an inquiry and then it shall be discussed in the GP meeting and then GP shall resolve to cancel the registration of the trader. If the trader after cancellation of the registration continues to procure MFP from the GP area then the Sarapanch or Secretary shall lodge complaint before the DFO. The MFP seized by the DFO from the trader shall be publicly auctioned and the sale proceeds thereof be deposited under the appropriate head of account under the Orissa Forest Act.
• If a trader is engaged in procurement of MFP without registering with the GP then the Sarapanch or Secretary shall lodge complaint before the DFO for taking appropriate action.

Process of Price fixation of NTFP

The government has a system of fixation of minimum price for procurement of MFP in order to protect the tribal and forest dwelling communities from exploitation. The fixation of minimum procurement price was started in 1971 by the Agriculture and Cooperation Department. The price was then fixed at the district level. During the last 30 years there have been many changes in the structure and mechanism of price fixation in the state. Now there are two different types of price fixation mechanisms in Orissa. For the nationalised items there is an advisory committee at the state level to decide the prices (started in 1982) and for other produces, which are under the control of Gram Panchayat, the Panchayat Samitis have been empowered in November 2002 to fix up the minimum procurement prices. Till 1997 a committee under the chairmanship of the District Collector fixed prices at the district level and the concerned Revenue Divisional Commissioner was approving these prices. Usually by the end of September every year the committee was supposed to fix up the prices, which would remain in force till next September. In 1997 the Welfare Department fixed the prices of NTFP at the state level especially keeping the operation of TDCC in mind. It continued till 2000.

After the transfer of ownership rights to Gram Panchayat in 2000 the mechanism for fixation of price was to be done by the GPs. The government could not decide any thing for fixation of prices for 2000-2001 and there was utter confusion at the district level to fix up the prices. In some of the districts the District Collectors took up progressive steps to announce the prices and in other there was no fair price declared. For the interim period i.e. one year (2001-2) the minimum procurement prices was fixed up by the District Collector. In November 2002 the government finally declared that the minimum procurement prices for NTFP would be fixed at the Panchayat Samiti level, which is going to be operationalised soon. The prices would be fixed in September in a meeting attended by the DFO, representatives of TDCC, OFDC and TRIFED. Once the prices are being fixed it would be discussed in Gram Sabha and Gram Panchayat to approve it. The GP can also make some changes in the prices based on the local needs. If the Panchayat Samiti fails to fix up the prices then the District Collector would call for a meeting to fix up the prices.

Price fixation has always remained as a matter of concern. The mechanism was different for different districts. Only Nuapara district committee had the adequate mix of primary collectors/their organizations, primary traders, NGOs and GP representative. Apart from Nuapara, NGOs were present in the price fixation committees only in case of Balangir. From proceedings of the price fixation committee meetings it is evident that there is no clear-cut basis for fixation of prices barring three districts of Nuapara, Ganjam and Sambalpur. The prices in the rest of the districts were fixed same as last year barring few changes here and there. In Nuapara prices of the NTFP in Dhamtari and Raigarh markets in Chhatisgarh were considered. The committee also had provision for going for interim changes in prices depending on fluctuations in Dhamtari and Raigarh market. In Ganjam, local TDCC and OFDC offices were requested to provide information on availability and market demand of various NTFP items in the district. Utmost care was taken while fixing prices for 24 NTFP available in the district in good quantity. The prices of neighbouring Kandhamal district and AP state were also taken into consideration. Similarly in Sambalpur district, the DFO provided the committee with information on availability and demand of various NTFP and their existing market prices.

Price fixation without proper arrangement to ensure it has no meaning. While in almost all districts price fixation committee resolved to inform the BDOs and GPOs for wider dissemination of information, only Rayagada and Koraput had elaborate plans for dissemination of information to GPs and display the same at GP level. It has been observed in NTFP rich areas that there was no relationship between fixed prices and price at which primary collectors were selling it. The futility of the system to fix prices can be seen from some examples. In Paralakhemundi and Rayagada forest divisions, price of tamarind are much higher then the declared price in the peak months, i.e., from February-April, and remains much above the declared rates throughout the season. Similarly, Amla in the same forest divisions faces the reverse trend, i.e., the price throughout the season remains below the declared price. The economics of pricing is difficult to comprehend, though in most parts of the panchayats in Nandapur and Patangi blocks of Koraput district bordering Andhra Pradesh, the demand of Amla is relatively higher than the supply.

Implementation of 2000 NTFP Policy

After the declaration of NTFP policy in March 2000 the state government virtually did not take adequate steps to inform the panchayats on their rights, responsibilities and duties. In many places the policy document reached the panchayat in 2001. The district administration too could not play proactive role to educate and train the functionaries of the panchayat and helped them to develop operational rules and regulations for control and management of NTFP. Even after getting the circulars from the government the Sarapanch or the Secretary of the panchayat could not make it public. The ward members, Gram Sabha and Palli Sabha are not fully aware on the changed NTFP policy. In some cases it was found that the Secretary received the order but he has never shared it with the Sarapanch. The Secretary on his own interest gives license to the traders. In some other cases as it would make the Secretaries over burdened they have intentionally taken no action to facilitate Gram Panchayat to exercise its ownership rights and control.

The policy presupposed a strong and activist panchayat to carry out the responsibilities entrusted, which eventually did not prove to be so. GPs could not become effective in controlling and regulating local trade and traders. One of the prominent limitations is lack of human as well as financial resources available with the GP. There was no proper orientation to the PRIs on how to proceed. No detail operational rules could be developed and forward to the GPs to make them function effectively. Besides, Sarapanch are so much a part of the local political economy that let alone using their quasi-judicial powers, even regular vigilance over local trade have become very difficult. However, things are not gloomy everywhere, there are GPs who have performed reasonably well where the Sarapanch have not only discussed implications of the new policy in respective Gram Sabha but also have approached the Government including the Panchayat Raj and Forest Department and other resource agencies for clarification of doubts regarding taking up trading activities according to the policy. They have registered number of traders in their panchayats for procurement of NTFP. At the same time the panchayats have been entrusted with enormous work for which they neither have the infrastructure nor the requisite human and financial resources. Since the panchayats did not have avenues to generate resource internally, they have to depend on external agencies especially the government for resource mobilisation, needless to say that this aid is being politically decided. Aid comes in the form of Govt. programmes and schemes and the political henchmen were made the major shareholders in such development investments. Panchayats have become scheme-implementing units and the dream of self-reliance, self-governance and self-managed panchayat seemed to have faded into oblivion. Although they are the owners of the local natural resources like NTFP they have not been able to exercise their ownership rights and control over these resources.

Elections to the PRIs were held in February 2002 and now majority of the PRI members are new and so far no orientation and training programs have been organised for them to educate them on their duties and responsibilities. Many of them don't know even the NTFP policy of 2000, which has made GP as the owner of NTFP.

Registration of Traders

As per the March 2002 Policy, it is mandatory for the trader (except Govt Corporations) to register itself with the GPs from which it is procuring. The objective behind such arrangement is to bring the NTFP trade under supervision of the GPs, and bring some income though not in terms of profit. GPs do have the authority to reprimand unscrupulous traders, in accordance with the OGP Act. In other words, it is now the responsibility of the GPs to ensure fair price to primary collectors through periodic monitoring and surprise checks. On the contrary, it is being largely observed that registration has no relationship with procurement. This implies that trade operations and registration under the concerned GPs have absolutely no relationship and are going parallel to each other. It is observed that from the standpoint of primary collectors, such registration with the GPs is not making any difference both with regard to overall procurement and payment. In most of the GPs, traders are procuring from primary collectors without knowledge of the GPs, which implies that PRI members are not keeping track of NTFP trade in local hats, let alone maintaining records of transactions. Most importantly, majorities of them are not even aware of their constitutionally sanctioned supervisory and regulatory roles. Therefore, the question of monitoring trade at least in the local hats does not arise.

Sarapanch vs. Panchayat Secretary

Efficiency of democratic decentralisation has suffered to a great extent because of personality clash between Sarapanch and Panchayat Secretaries. The number of GPs where these two functionaries work with co-ordination is handful. There is a great degree of distrust and underestimation for each other. For the Panchayat Secretaries, the Sarapanch are illiterate tribal who just by virtue of political manoeuvring cannot dictate terms. Similarly, for the Sarapanch, the Panchayat Secretaries are Govt officials who are insensitive to tribal problems and should remain subservient to them. It is important to note here that the Panchayat secretary being literate controls all information that comes to the GP from external sources and in the process controls the functioning of other GP members including the Sarapanch.

It is almost 3 years since the new policy on NTFP came to streamline procurement and trade through the GPs but till now the PRI members have not assumed any responsibilities in this regard. Registration of traders intending to trade in the GP, as per the policy, has turned out to be a farce. This whole arrangement of registering in the GP by giving a fee of Rs. 100/ per produce has been major bone of contention between the Sarapanch and the Panchayat Secretary leading to the suspension of the later.

Power to Punish

Under section 152 of the OGP Act, 1964, the Panchayati Raj Department passed an order, dated 26.05.2000 enumerating the rules through which GPs will manage NTFP trade in their respective area and Orissa GP (MFP Administration) Rules passed in November 2002. These rules emphasise two broad areas; one specified the trade arrangement, and the other about control or regulation of the traders. The registered traders should give a monthly report of the volume of different NTFP collected, sold and transferred to other places to the concerned GPs and the trader would also submit an annual return. Each GP has to submit an annual report to the Forest Range Officer. Secondly, GP has the authority to reprimand the traders who are found to be paying less than the minimum procurement price fixed by the Government. The concerned Sarapanch will carry out an inquiry if there is a complaint in this regard. The Sarapanch will then serve a show cause notice to the accused and if need be conduct a hearing at the panchayat level for settlement of the complaint. The Sarapanch will present the explanations of the accused trader along with his/her inquiry report in the next session of the GP. Then if the GP finds the accused guilty, his registration can be cancelled and he may also be forbidden to trade in the GP the next season. Then according to section 6 of the order, the convict may also appeal for justice according to section 133 of the OGP Act, 1964 that says that an aggrieved can appeal to the Sub Divisional Officer within 30 days of such direction given by the GP and then within 30 days to the Collector as the second appeal.
According to the Rules of November 2002, although the GP has the ownership right over MFP it can't seize the MFP procured by an illegal trader. This would be seized by the DFO and the sale proceeds would not come to the GP as it would go to the government. The irony is that the GP can't even punish the illegal traders who are engaged in procurement of MFP without any registration with the GP. The Sarapanch or Secretary shall lodge a complaint before the DFO and then it depends on the course of action of the DFO.

Sal Seed Denationalized in March 2006

In a changing scenario the government of Orissa vides its resolution no.3965 dated 02.03.06 denationalized sal seed with effect from the date of issue order. In the new system, the traders are required to have a registration with the panchayat on payment of Rs.100 for procurement of sal seed. There is no royalty and permit required to lift the stock for both internal and external transport. At present TDCC and OFDC donot play a monopoly role in sal-seed marketing.