System of Procurement of Minor Forest Produces

MFP is gathered by the people living in forested areas. Some amount of primary processing, such as drying of leaves, deseeding, etc. are taken up by the gatherers. These raw, unprocessed produces are then sold to private traders or State Government agencies.


1. Introduction

The scheme named “Mechanism for marketing of Minor Forest Produce (MFP) through Minimum Support Price (MSP) and development of value chain for MFP” vide order dated 06.08.2013 has been in place for providing MSP to gatherers of forest produces and introducing value addition and marketing through tribal groups and clusters. The geographical coverage of the Scheme includes all states and union territories of India. 

2. Scheme Implementation Architecture

The Scheme includes proposals for procurement, infrastructure development, training, value addition and marketing (setting up of Van Dhan Vikas Kendras ). The architecture of responsibilities to implement the scheme is the following:

Fund Flow Mechanism:

Funds flow

Scheme Implementation & Monitoring Mechanism:
Adapted from Cabinet Approved Scheme (File No.2/1/2011-CP&R Page 31 and 32 of 73)

(i) Ministry of Tribal Affairs - Central Apex Committee
The Ministry of Tribal Affairs as the Nodal Ministry will be the Central Apex Committee and responsible for policy, oversight and obtaining and providing budgetary resources for the Scheme. Secretary, MoTA will chair the constituted Central Apex Committee. The representatives from different Ministries and Departments to promote tribal centric gathering, value addition and marketing of MFPs shall also be co-opted on to this Committee

(ii) TRIFED - Executive Committee
TRIFED will function as the technical support unit for MoTA and will coordinate the implementation and flow of funds of the Scheme through the designated State and other agencies including District Implementing Units through an Executive Committee setup within TRIFED (Annexure 2).

(iii) Pricing Cell
The Minimum Support Price will be recommended by the Pricing Cell setup in TRIFED. The Cell will constitute of members and experts in areas of price fixation, economic analysis, trade and marketing of MFPs. The announcement of MSP would be done by MoTA.

(iv) State Government / State Nodal Department and other Agencies
The State Government would identify the State Nodal Department and other agencies including the District Implementing Units. The State Nodal Department will coordinate the flow of funds and related matters of oversight to the District Unit. The agencies will oversee the implementation mechanism and allied activities through the District unit and in Haat Bazaars. A State Project Management Unit (PMU) comprising of professionals in the field of finance, marketing, IT and social sector etc. would be setup to support the State Nodal Department and other agencies.

(v) State Level Coordination and Monitoring Committee
The Chief Secretary of respective state will chair the State Level Coordination and Monitoring Committee (SLCMC) comprising of representatives from State Nodal Department (Tribal Welfare Department) and other agencies and also including Secretaries of Rural Development, Finance, Panchayati Raj, Industries, Handlooms and Handicrafts, Agriculture and other stakeholders. There would be freedom to co-opt any other stakeholder deemed necessary.

(vi) District Implementation Unit / District Level Coordination and Monitoring Committee

(a) The District Collector apart from heading the implementation in the district will also chair the District Level Coordination and Monitoring Committee (DLCMC) comprising of officials from Tribal, Forest, Rural Development, Zila Panchayat, Agriculture, NIC and Revenue formations. There would be freedom to co-opt any other stakeholder deemed necessary.

(b) The implementation in the district will be chaired by the Collector who will be responsible for overall preparation of the haat bazaar wise consolidated District Plan which will include procurement, infrastructure, value addition and marketing development (Van Dhan) plan. In the implementation of the Scheme, the District Collector will exercise all the financial and administrative powers to the extent granted by the State Government.

(c) A District Project Management Unit (PMU) comprising of professionals in the field of accounting, marketing, IT and social sector etc. would be setup to support the district unit.

(vii) Primary Level Procurement at Haat Bazaars

(a) Primary level procurement at Haat Bazaars will be done through the existing set up of the state/ district or by engagement of Primary Procurement Agencies such as Cooperative Societies/ LAMPS/ Mahila Samities/VDCs/JFMCs/ self-help groups (SHGs) formed in the State including those formed under the National Rural Livelihood Mission constituting of local tribal majority members etc. selected by the District Collector in consultation with the Gram Panchayat. Such agencies shall be paid commission at the rate not exceeding 7.5% of the value of MFP procured through them. The expenditure for the purpose will be charged from the Overhead expenses which is upto 20% of the budgeted procurement outlay (Clause 3, Annex A of Cabinet Approved Scheme, Page 22)

(b) The Haat Bazaars as the fulcrum of the Scheme will be developed as composite vibrant grid to ensure last mile connectivity as per Provisions of Panchayats (Extension to Scheduled Areas) Act, 1996 and The Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006 to secure and institutionalize tribal commerce.

(c) The buyers including Government led SHGs would also operate in the Haat Bazaars regulated by the Gram Sabha as per provisions of the PESA Act 1996 (Section 4 Clause (m)). The Haat Bazaars will also serve as the basis for setting up of value addition and marketing centers namely ‘Van Dhan Vikas Kendras’.

(d) Primary, Secondary and Tertiary level value addition units will be setup in villages, tehsils or talukas and district headquarters based on the availability of minor forest produces and tribal population.

(e) The Primary Level Gatherers as rightful owners of forest produces as per FRA Act 2006 (Chapter II U/S 3 Clause 1(c)) would be the focus of the Scheme and every activity will focus on the benefits that he/she derives and would be accordingly ordained.

(viii) Federation of SHGs

The SHGs for procurement and/or SHGs for value addition & marketing would be developed as producer groups through a hierarchy within a federation of SHGs at the National, State and District & below levels. This concept has been proposed keeping in view the need for aggregation of produce and strengthening of individual tribals through clusters. This will also lead to economies of scale, holding and bargaining power to the SHGs.

3. Risk Management
A risk management matrix to identify, pre-empt under-performance and support SHGs which may not function as per expectations which will be put in place. The Scheme entails business activities at the levels of procurement, value addition and marketing (Van Dhan) which would be a startup activity for the predominantly tribal SHGs. It is expected that 60% of the SHGs formed would take off. The remaining weak and failed units would need resuscitation, handholding or transfer to other activities which suits them.

4. Memorandum of Understanding (MoU)
The various roles and responsibilities of the Central and State Government Ministries/Departments and Agencies will be guided by a MoU signed between the Central Government representative TRIFED and the Nodal Department nominated by the State Government. This will ensure accountability and clear definition of roles and responsibilities (Annexure 3).

5. Monitoring and Oversight
A robust oversight mechanism including audit and IT-enabled Management information system (MIS) will be put in place to ensure transparency, fix accountability and penalize malafide actions to the norms of the Scheme. The MIS platform will link the Central Agencies and Haat Bazaar level agencies. The platform will be developed by TRIFED.

The Annexures attached as separate documents outline the Roles and Responsibilities; Composition of the Apex and Executive Committee; and the Memorandum of Understanding (MoU)