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MSP for minor forest produce

MSP for minor forest produce

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  • GS 3 || Economy || Agriculture || Agricultural Prices

 Why in News?

  • Sponsorship scheme by cabinet for providing Minimum Support Price (MSP) to forest inhabitants for Minor Forest Produce (MFP).

 Provisions

  • The Centre has notified a varied hike in MSP ranging from 200% to 5.6% for 19 MFPs.
  • The government has also added 17 more items (exiting 23) to the forest produce covered under the market support scheme.
  • [These include mahua flowers, dried tejpatta, jamun dried seeds, dried amla pulp (deseeded), soap nut (dried), Arjuna bark and Giloe among others.]
  • A total of 52 items is proposed to be brought under the MFP for MSP umbrella.
  • The notification puts out prices for 40 items for now.
  • The Central government plans to spend around Rs. 960 crore while states would contribute about Rs. 250 crore.
  • The ministry of tribal affairs (MoTA) issued the notification and it is now for the states to implement this.
  • Tribal Cooperative Market Development Federation of India Ltd. (TRIFED) has also been given
  • They are to develop market linkage between state agencies (through State Nodal Department), and bulk users and buyers to enable implementation.

 Objectives of Scheme

  • The scheme for providing MSP for minor forest produce comes on the lines of support price for agricultural products.
  • The decision is being taken in view of the general cost escalation on all fronts.
  • The objective is to ensure fair and remunerative price to MFP
  • According to the ministry, nearly 5 crore tribals are expected to directly benefit from this revamped scheme.

Concerns of the Scheme

  • Funds – MSP system for minor forest produce had been introduced by the previous government as well.
  • The centre has earmarked nearly Rs 1,100 crore for this program in the past 5 years.
  • But hardly 25% of this has been released to the states.
  • The bulk of even the disbursed funds have remained unutilized.
  • Moreover, none of the major forested states has submitted the audited report on funds utilization.

 Remuneration

  • The minor forest resources have been made freely accessible to forest people under the Forest Rights Act.
  • These include mahua, tejpatta, wild honey and similar others that have several industrial, therapeutic and cosmetic uses.
  • However, the tribal, who gathers them from the woods, do not get the fair remuneration for these articles.
  • It’s because they normally have to sell them at meager rates at local haats dominated by cartelized traders and contractors.
  • Middlemen – Some state governments have acquired monopolistic marketing rights on the much sought-after forest products.
  • g. tendu leaves, bamboo, tamarind
  • But, the state agencies nominated to lend price support often prefer to buy the stuff from middlemen.
  • They fail to create the infrastructure for procuring it directly from individual collectors.
  • Thus, for all practical purposes, the collectors of the minor forest produce are at the mercy of middlemen.
  • MSP – States also do not pay the MSPs even though the Centre is supposed to bear 75% of the losses incurred on such operations.
  • Odisha is one of the few states which have opted to implement the MSP scheme for selected forest products.
  • But it is reported to be considering discontinuing the scheme because of the heavy financial burden.

 Requirements

  • The government has largely failed to realize the futility of raising the MSPs of crops without their effective enforcement.
  • The need is for well-advised marketing reforms in this sector.
  • This should be aimed specifically at ending the middlemen’s role over the minor forest produce trade.
  • Equally important is to encourage direct linkages between forest produce gatherers and end-users of these products.
  • g. the pharmaceutical, cosmetic and food-processing industries
  • These are essential to meaningfully complement the move to fix MSPs for the minor forest produce.

 Additional Info

Two Types of Schemes:

  • Centrally Sponsored Scheme
  • Central Sector Scheme

Centrally Sponsored Scheme – Finance will be by both center and state. Not center will solely take care of it. There is a ratio of 60:40 for states. 90:10 :: Center:State for north-eastern and three Himalayan states.