Making tribal entrepreneurs

Forest dwellers can turn to business and even provide jobs to others by taking advantage of the large market of forest produce

RR Prasad | April 12, 2016


#ministry of tribal affairs   #business   #entrepreneurs   #Tribals   #MFP   #forests  
Tribals

Appropriate policies and practices for skills development currently occupy a dominant place in development discourse. But the focus is more on skills development for employability. Equally important is that we train our youth in a manner that they become capable to manage the natural resources in their areas and become entrepreneur and subsequently offer jobs instead of seeking jobs. This need is perhaps more appropriate in the tribal areas which are endowed with rich and varied forest resources.  

The forest occupies a central position in tribal culture and economy. For numerous forest dwellers across India, particularly people from scheduled tribes, minor forest produce (MFP) has significant economic and social value. In India, the MFPs over the years have been playing an important role in the viability and survival of tribal households because of the importance of forests in their social, cultural and economic survival.

Most states have nationalised certain MFP items – mahua, sal seeds and flowers, tendu (bidi) leaves and certain gums. The produce accounts for 50 percent of forest revenue, according to the forestry statistics of India; the states trade in them through cooperatives and corporations.
The bidi leaves are plucked from tendu tree (scientific name: Diospyros melanoxylon) which is found widely across India. Leaves plucked from its shrubs are used to wrap bidi, the poor man’s cigarette. About 550 billion pieces of bidi (rolled by 10 million people) are sold every year in India, as per the All India Bidi Industry Federation. Moreover, gathering bidi or tendu leaves is labour-intensive and employs millions of tribals during the lean month of May, when they have very little else to earn from.

According to a World Bank estimate, the MFP economy is fragile but supports close to 275 million people in rural India. These people comprise the poorest, including 54 million tribals. It is ironical that the poorest people in India are living in the areas of richest natural resources.

Forest Rights Act, 2006 (FRA) and the Panchayat (Extension to the Scheduled Areas) Act (PESA), 1996, however, render state trading of MFP illegal. Regarding MFP, the central PESA provides “While endowing panchayats in the Scheduled Areas with such powers and authority as may be necessary to enable them to function as institutions of self-government, a state legislature shall ensure that the panchayats at the appropriate level and the gram sabha are endowed specifically with the ownership of minor forest produce; (Section 4(m) (ii)). Besides, Forest Rights Act, 2006 (FRA) gives the right of ownership, access to collect, use and dispose of minor forest produce which has been traditionally collected within or outside village boundaries. Both and FRA and PESA are key legislations of Scheduled Area governance, therefore they need to be read together. PESA endows ownership of MFP.”

The rights conferred under the FRA of 2006 include the right to collect and sell MFP. These include tendu leaves used in bidi, and bamboo that have high commercial value and were under the forest department’s control.

But the tribals involved in collection of MFP are not made aware of their rights. The main reason why the forest department officials are not telling tribal people about their rights over MFP is that the forest produce is a major source of revenue for forest departments.
The MFP economy provides poor returns to gatherers, who have limited bargaining power as they either participate in markets that are poorly developed or are under conditions of monopoly. Merely gathering MFPs rarely generates enough revenue to sustain the people harvesting them. Financial return to those involved in NTFP collection and primary processing is very low, leading only the poorest to be involved in collection of MFPs.
Tribal communities are still largely insulated from the market signals that should influence quality and volume. MFP gatherers are not aware of the price in larger markets and may be indebted to the buyers and thus are forced to sell their produce at low prices. Moreover, gatherers are mostly poor and unable to bargain for fair prices.

Marketing efficiency constrains affects the livelihoods of communities. A market is said to be efficient when the gatherer’s share is high and involves less marketing costs. But in case of MFPs, it has been observed that the collectors’ share is low while the margin of intermediaries and marketing costs are high.

What tribal MFP collectors get from the forest department is a small share of revenue from the MFP sales proceeds with administrative cost deducted. The PESA Act endows the gram sabha with the ownership rights over minor forest produce. MFP is now also owned by forest dwellers under the FRA. As such, “revenue sharing” by the forest department is no longer legal.

The involvement of forest department in MFP collection should aim at imparting knowledge and skill to the tribals on scientific methods of collection, harvesting, storage, etc., in order to sustain and improve the quality of the product.
 The costs to be incurred in organising collection, processing, transportation and marketing of the MFPs should be borne by the forest department or other government agencies from the funds available under the tribal sub-plan, special central assistance (SCA) to tribal sub-plan (TSP), and grants available under Article 275(1) of the constitution.

As owners of the MFPs and managers of the MFP trade, the forest dwellers should be given the entire revenue and the forest department should not deduct any share from the sales. Income accrued from the MFP trade should be shared by the forest dwellers among themselves through their self-help groups (SHGs) and the SHG federations. The members of the SHGs and SHG federations should be given skill training in scientific methods of MFP collection, processing, value addition and marketing.

MFP collection can also be a powerful strategy for transforming forest dwellers into robust, autonomous people’s organisations by giving them a strong economic drive and management inputs to facilitate a scale of operation required for adequate value realisation and sustainable management process. There is thus a need to revisit the policy of skill development with a view to bringing in a new focus on management skills.

Prof Prasad is associated with the National Institute of Rural Development & Panchayati Raj, Hyderabad

(This article appears in the April 1-15, 2016 issue)

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