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MSP for MFP:

To provide fair returns to the millions of tribal primary gatherers, the idea of providing MSP for forest produce on the lines of support price for agriculture produce was mooted by the Central government in 2010. The Union Cabinet, on August 2013, approved the centrally sponsored scheme for providing Minimum Support Price (MSP) to forest dwellers for minor forest produce (MFP). The Cabinet decision mentioned bamboo and tendu leaves along with other MFPs like karanj, mahua seed, sal leaf, sal seed, lac, chironjee, wild honey, myrobalan, tamarind, and gums (gum karaya), in the list of 12 MFPs for which the MSP scheme has finally been approved. But it has specified that the scheme will apply to only non-nationalized (non-monopolized) MFPs in each state, effectively leaving out tendu and bamboo. While development of competitive market for MFP and capacity building of MFP gatherers through formation of self-help groups/ co-operatives and producer companies would be the key to elimination of traders? exploitation in the long run, strategic government intervention would be necessary in the short and medium term in the form of minimum support price (MSP). This is intended to ensure a basic minimum income for MFP gatherers.  

Key important features of 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.
  • Each State shall designate a State Nodal Department (SND) which will be responsible for implementing and monitoring the scheme in the State. SND shall preferably be the Tribal Development Department.
  • Each State shall also designate State Agency/ies (SA) for undertaking procurement of MFP under the Scheme.
  • Each State shall submit their Annual Action Plan for procurement of MFPs under MSP scheme by 31st of Jan every year.
  • Ministry of Tribal Affairs in association with TRIFED will monitor the performance of designated state agencies and review it periodically.
  • 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.
  • TRIFED would scrutinize the accounts of the State Agencies.

The Central government plans to spend Rs. 967.28 crores while states would contribute Rs. 249.50 crores “to ensure fair and remunerative price to MFP gatherers”. As stated, the schemes will be initially implemented in the States having Scheduled Area and Scheduled Tribe in accordance with Fifth Schedule of the constitution of India.  

MSP’s main objective is to provide fair returns to the MFP gatherers mainly through MSP for MFP, collected by them along with necessary infrastructure at local level. The scheme envisages fixation of Minimum Support Price for the selected MFP based on the suggestion received from TRIFED & State and declaration of MSP for selected MFP by the Ministry of Tribal Affairs. Procurement and Marketing operations at pre fixed MSP will be undertaken by the designated State Agencies. The Central Government will provide 75% of the working capital requirement in initial two years in the form of share capital grant and share losses, if any, in the ration of 75:25. MSP has been designed as one of the social safety measure for the MFP gatherers, who are primarily members of Scheduled Tribe. MSP intends to establish a system to ensure fair monetary returns for their efforts in collection, primary processing, storage, packaging, transportation etc. 

In October 2016, the scheme was revised by the Government of India. On one hand, the scheme was extended to all the states of India and added another 14 MFPs to the list eligible for MSP. On the other hand, the guidelines have heavily cut down the MSP for important MFPs such as lac, chironjee, tamarind, karanj seeds and mahua seeds. While it has allowed the states to enhance the new rates by up to 10%, it has also put the condition that any losses incurred in the process would be solely borne by the state government. Again the revised guideline also allows the state a free hand to completely stop the scheme with a clause that says: “State is also at liberty to suspend the process of procurement or not to do procurement of MFP at all.” The revised guidelines have also discouraged construction of storage facilities and warehouses.  


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