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Marketing of Nontimber Forest Products in India: Opportunities and Challenges

Dr. Parag DUBEY Faculty of Marketing Indian Institute of Forest Management (IIFM) PO Box 357, Nehru Nagar Bhopal (MP), INDIA Email- parag@iifm.ac.in

NTFPs- Current Scenario


About 100 million people in India live in and around forests to get a part of their livelihood from NTFPs About 70 million are tribals -mostly forest dwellers Women are the main gatherers & earners from NTFPs Family is the basic unit around which the social organization of the tribal society takes its form

Shiva and Mathur, 1996

NTFPs Classification in India

GROUP-I NTFPs of Plant Origin - Edible Plant Products - Spices and Condiments - Medicinal Plants-Aromatic Plants - Fatty Oil Yield Plants - Gum & Resin Exuding Plants - Tan Yield Plants - Dye & Colour Yield Plants - Fibre & Floss Yield Plants - Bamboo-Canes - Fodder&Forage - Fuelwood, Charcoal Making - Bidi Wrapper Leaves - Other Leaves for Plates - Beads for Ornaments - Saponin & Marking Nut Plant-Others

NTFPs Classification in India


Shiva and Mathur, 1996 GROUP-I NTFPs of Animal Origin - Honey & Bees Wax - Lac & Shellac - Tussar and Other Silk - Insects and Animal-Hides, Skins and Feathers - Horns, Bones and Shellac-Ivory and Musk NTFPs of Mineral Origin -Mica, Sand, Gravel -Other Minerals GROUP-II Services-Tourism, Recreation, Wildlife

National Forest Policy, 1988 & NTFPs


Minor forest produce provides sustenance to tribal population and to other communities residing in and around the forests. Such produce should be protected, improved and their production enhanced with due regard to generation of employment and income. The rights and concessions from forests should primarily be for the bonafide use of the communities living within an around forest areas, specially the tribals.

National Forest Policy, 1988


Their domestic requirements of fuelwood, fodder, minor forest produce and construction timber should be the first charge on forest produce. Protection, regeneration and optimum collection of minor forest produce along with institutional arrangements for the marketing of such produce.

Institutional Setup for NTFPs Marketing in India


TRIFED National NAFED

TDC/FDC

State

ACMF

LAMPS

GCC

ACS

Primary

PACS

PMS

FSS

NTFPs Collectors/Tribe

Issues in NTFPs Management


3000 plants species which yield NTFPs (CSIR, 1985) 150 excluding medicinal plants, are commercially exploited Little is known of the actual production, use, and the way of marketing The state forest department is responsible for NTFPs development process, from inventory to product marketing Absence of a definite action plan at state and national level for extraction and marketing Collection, processing, and marketing continue to operate in a traditional way in most parts of the country. Non-sustainable harvesting Lacking of Value-added NTFPs

Constraints to NTFPs Sector


Local markets are thin, a small change in supply has large effect on the market High transportation cost in moving NTFPs from rural to urban centers Ineffective policies and legislations Production and processing methods are rudimentary

Marketing of NTFPs
Mostly Gathered from Forest Production Often Seasonal Producers Frequently Poor/Landless Quantity is Small at HHs Level % of Sale Price Received Extremely Small Information on Exploitation lacking Weak links to official Marketing System Limited Marketing Practices Non Existence of Marketing information Lack of Marketing Capabilities Poor Institutional and Infrastructure Support

Common NTFPs Market Channels

The Exploitative Nature of NTFPs Market


Bigger Trader/Manufacture

Processing

NTFP

NTFP

Export

NTFP

Local Trader/Agent

Consumer
NTFP

Collector

[Curved Arrows depict the financial flow] [Size of circle depicts the value of NTFPs]

A Tribal Family Income

Agriculture (18%)

Forest (50%)

Cattle(14%)

Agriculture

Cattle

Other Employment

Other Employment (18%)

Forests

Time Utilisation by Male & Female adults in a Tribal Family


Other Labour NTFP Collection Agriculture LEISURE

Other Agriculture Labour (18%)


Household Agriculture

Cattle(14%)
NTFP Collection

NTFPs & RURAL LIVELIHOOD


Safety nets for rural households income in lean agriculture season or when crop failure Gathering and marketing at the local level are mostly done by women and children Empowering women and increase their contribution to household incomes

Marketing of NTFPs in M.P.


State Controlled NTFPs Leased NTFPs NTFPs under free trade

Important NTFPs Markets in MP & India

State Management of NTFPs


State Forest Department had nominal control on the trade of any NTFPs Nationalisation of tendu leaves in 1964 Contracts for collection of tendu leaves from government lands were awarded to private parties The petty traders purchase leaves grown on agriculture lands The revenue received by the government was very low, compared to the profit earned by the contractors

Objectives of Nationalization
To control the theft of tendu leaves from the forest and other government lands; To enhance the state revenue To ensure payment of proper wages to the tendu leaf pluckers and To free the downtrodden from the clutches of the middlemen and traders

Co-operative Management of NTFPs


In 1988, the State government of MP took a decision to co-operatize the management of
Diospyros melonoxylon (Tendu) leaves Terminalia chebula (Harra) fruit Shorea robusta (Sal) seeds Sterculia urens (Kullu) Boswellia serrata (Salai) Gums

Totally remove the middlemen involved in collection, storing, processing, grading and marketing of nationalised NTFPs, Three-tier organization was formed for effective implementation of co-operative management

NTFPs Contribution to Total Export


Economic Significance of NTFPs

1960-61

1970-71

1980-81

1990-91

NT FPs Contribution (%)Total Exports(%)

NTFPs Production & Employment Potential


Economic Significance of NTFPs
14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0 Current Production Potential Production Current Employment Potential Emplyment

Price Spread in Phyllanthus emblica


Channel-I (Annola)
Channel-II (Annoa)l
Collector Tribal Agent Prim ary Wholes aler Secondary Wholes aler
Collector Tribal Agent Primary Wholesaler

Channel-III (Annola)

Channel-IV (Annola)

Collector Tribal Agent Secondary Wholes aler

Collector Primary Wholesaler Secondary Wholesaler

Channel-V (Annola)

Channel-VI (A nnola)

Collector Primary Wholesaler

C ollector S econdary W holesaler

Collection in 000' SB
1000 2000 3000 4000 5000 6000 7000 8000 0

C o lle c tio n o f D io s p yr o s m e lo n o x ylo n in M P & C h h a tis g a r h

Year

19 65 -6 19 6 67 -6 19 8 69 -7 19 0 71 -7 19 2 73 -7 19 4 75 -7 19 6 77 -7 19 8 79 -8 19 0 81 -8 19 2 83 -8 19 4 85 -8 19 6 87 -8 19 8 89 -9 19 0 91 -9 19 2 93 -9 19 4 95 -9 19 6 97 -9 19 8 99 -0 20 0 01 -0 20 2 03 -0 20 4 05 -06

Value in M INR
1000 1500 2000 2500 500 0

Valu e R e ce iv e d for D iospyros me lonoxylon in M P & C hhatisgarh

Y e ar

19 89 -9 19 0 90 -9 19 1 91 -9 19 2 92 -9 19 3 93 -9 19 4 94 -9 19 5 95 -9 19 6 96 -9 19 7 97 -9 19 8 98 -9 19 9 99 -0 20 0 00 -0 20 1 01 -0 20 2 02 -0 20 3 03 -0 20 4 04 -0 20 5 05 -0 20 6 06 -07

Ye ar

Volum e vs Collection Rate in Diospyros m elonoxylon

Collection Rate per SB Collection in 000, SB

19 89 -9 0 19 90 -9 1 19 91 -9 2 19 92 -9 3 19 93 -9 4 19 94 -9 5 19 95 -9 6 19 96 -9 7 19 97 -9 8 19 98 -9 9 19 99 -0 0 20 00 -0 1 20 01 -0 2 20 02 -0 3 20 03 -0 4 20 04 -0 5 20 05 -0 6 20 06 -0 7 20 07 -0 8

Collection in 000'kg 0 1 00 0 0 2 00 0 0 3 00 0 0 4 00 0 0 5 00 0 0 6 00 0 0
Ye a

C o lle ctio n T e rmin alia ch e bin la P & C h h atisg arh of u M

r 19 s 71 -72 19 73 -74 19 75 -7 19 6 77 -78 19 79 -80 19 81 -8 19 2 83 -84 19 85 -8 19 6 87 -88 19 89 -90 19 91 -9 19 2 93 -94 19 95 -96 19 97 -9 19 8 99 -00 20 01 -02

V a lu e R e c e iv e d fo r T e r m in a lia c h e b u la in M P
45 40 35 30

Value in M INR

25 20 15 10 5 0 1994 -95 1 995-9 6 19 96-97 1997-98 19 98-99 1999 -00 2000-01 2001-02 2002 -03

Ye a r

Volume vs Collection Rate in Terminalia chebula

1994-95 1995-96 1996-97 1997-98 1998-99 1999-00

2000-01 2001-02 2002-03

Year

Collection rate in INR per '000kg

Quantity collected in '000kg

Empowerment for Poverty Eradication


To raise NTFPs Collector's incomes and improve quality of life

Knowledge & Awareness Organize Rural Womens Groups & their Federations Investment Support

Government Departments

Financial Institutions Panchayati Raj Institutions Markets & other Institutions

Executive Committee from Village Organization Support to Village Organizations for Marketing Secure linkage with Govt. Departments, Financial Institutions & Markets Monitoring of the Groups Micro Finance Functions

Self Help Groups (SHGs) Networks of the Poor


Block Committe e

Executive Committee from SHGs Strengthening for Marketing NTFPs Arrange line of credit to the SHGs Social action & Support activities Village development Village Organization

Group level NTFPs Collection

Thrift and credit activities Monitoring

SHGs

SHGs

SHGs

SHGs

SHGs

SHGs

10 - 15

The Strategic Interventions Required


No 1 Essentials of NTFP Marketing Non-destructive harvesting of NTFPs Intervention

A record of NTFPs collection


at Gram Sabha level A procedure to ensure nondestructive harvesting

Tackling the exploitative The Pharmaceutical /NTFPs nature of the NTFPs Companies to procure raw market material from Gram Sabha (or SGHs of gram sabha) or from known dealers who in turn have procured from gram sabha

No 3

Essentials of NTFPs Marketing

Intervention

Ensuring greater Local processing of NTFPs financial return & Microfinance (revolving funds) employment Optimum utilization of both male generation to the and female capabilities local people Improving the well-Improving the health of the forest being of the tribal&promoting NTFPs regeneration woman Greater financial return to women with focus on the needs of the family Male members to be involved to reduce resource wastage & to utilize their capacity to the optimum

Strategic Intervention to Ensure Better Return to the Primary Collector


NTFP
Local Trader/ Manufacture Big Trader/ Manufacture Export

NTFP

A Bargained transaction

Consumer
Local Processing

Collector
NTFP

NTFP

[Size of circle depicts the value of NTFP] [Curved Arrows depict the financial flow]

Improve Regulations & Policies Affecting the Development of NTFPs


Rules governing production and trade of NTFPs should be transparent Need to allow rural communities to get more involved in value addition & trade of NTFPs Remove high barriers to entry for rural communities to engage in large-scale trade and exports Need to eliminate blocks which increase transaction costs Need to harmonize NTFPs policies to promote integration of regional markets

Commercialization of NTFPs
Big traders & manufacturers to depend on micro-enterprises for supply of semi-processed NTFPs Big traders can invest on skill enhancement for micro-entrepreneur and adopt a transparent system of procurement The Gram Sabha should have a record of all NTFPs collected quantities to ensure nondestructive harvesting

Women entrepreneurs to be encouraged to take up local processing and to adopt local use Developing marketing information system No resource wastage

E ffect o f V a lu e Ad d itio n - L e af P la te
100 90 80 70 60 50 40 30 20 10 0 P la in Mo u ld e d Mo u ld e d C u t

Price in INR for 25 pieces

1 4 "D ia me te r 1 2 "D ia me te r

T ype s of Le af P late

Variations in Leaf Plate Diameter Size in Inch 20 15 10 5 0 Plain Moulded Plate Moulded Cut Moulded Bowl

V a lu e A d d itio n in H o n e y
180 160 140 120

Price in INR per KG

100 80 60 40 20 0 Raw Pro c e s s e d O p e n Proc e s s ed Pa c k

Type s of Hone y

V a lu e A d d it io n in T a m a r in d
40 35 30 25 20 15 10 5 0 A a t i w it h S e e d P h o o l S e e d le s s B r ic k s

Price in INR per KG

T y p e s o f T a m a r in d

Thank You.

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