The government will fix a market-linked minimum support price (MSP) for 14 items - including bamboo, tendu leaf, honey and tamarind - on the list of minor forest produce from January 1, 2013. This is being done to "substantially" increase the income of around 10 crore tribals and forest dwellers.
The MSP implementation comes exactly five years after the watershed Forest Rights Act became effective, and more than a year before the next general elections in 2014. Political strategists in the government believe that fixing the MSP for forest produce can benefit the UPA - a la MGNREGA in the 2009 elections.
The forest rights law, enforced by the UPA-1, gave forest dwellers and tribals the right to harvest minor forest produce for their livelihood, a business considered to be worth Rs. 5,000 crore annually. However, they still get less than one-tenth of the market price for the produce collected.
"The new MSP will substantially increase the income of tribals without having a ripple effect on the market price of the produce," tribal affairs minister Kishore Chandra Deo said.
With this, tribals and forest dwellers - who are currently forced to sell items such as tamarind for Rs. 8 per kg, as compared to the market price of Rs. 100-120 per kg - will get a higher selling price.
The new mechanism, approved by the Planning Commission, will have state government agencies buying the produce directly from tribals at the MSP and then selling it to end-produce manufacturers. The tribals, however, will have the choice of selling the produce to private agencies - provided they pay more than the MSP.
A Central Price Fixation Commission will be set up by the tribal affairs ministry to fix the MSP on an annual basis. The Tribal Cooperative Marketing Development Federation of India will enforce it across the states, Deo said.
While the MSP will initially be declared for 14 minor forest products at the national level, it would then be extended to other derivatives.
In 2010, the panchayati raj ministry had constituted a committee under T Haque to recommend a mechanism for determining the minimum support price for minor forest products. A year later, the panel submitted its recommendation for a central MSP.