Marketing of Non-timber Forest Products in India: Opportunities and Challenges

1. Marketing of Non-timber 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

3. 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

4. NTFPs Classification in India

5. NTFPs Classification in India

6. 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.

7. 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.

8. Institutional Setup for NTFPs Marketing in India TRIFED National NAFED State ACMF TDC/FDC LAMPS GCC ACS Primary PACS PMS FSS NTFPs Collectors/Tribe

9. Issues in NTFPs Management • 3000 plants species which yield NTFPs (CSIR, 1985) • 150 excluding medicinalplants, 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

10. 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

11. 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

12. Common NTFPs Market Channels

13. The Exploitative Nature of NTFPs Market Bigger Trader/Manufacture NTFP Processing Export NTFP NTFP Local Trader/Agent Consumer [Curved Arrows depict the financial flow] NTFP Collector [Size of circle depicts the value of NTFPs]

14. A Tribal Family Income Agriculture (18%) Forest (50%) Cattle(14%) Other Employment (18%)

15. Time Utilisation by Male & Female adults in a Tribal Family Other Labour Agriculture (18%) Other Labour NTFP Collection Household Agriculture Cattle(14%) Agriculture NTFP Collection LEISURE

16. 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

17. Marketing of NTFPs in M.P. • State Controlled NTFPs • Leased NTFPs • NTFPs under free trade

18. Important NTFPs Markets in MP & India

19. 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

20. 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

21. 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

23. NTFPs Contribution to Total ExportEconomic Significance of NTFPs

24. NTFPs Production & Employment Potential Economic Significance of NTFPs

26. Price Spread in Phyllanthus emblica

33. Empowerment for Poverty Eradication To raise NTFPs Collector's incomes and improve quality of life Knowledge & Awareness Government Departments Organize Rural Women’s Groups & their Federations Financial Institutions Panchayati Raj Institutions Investment Support Markets & other Institutions

34. Self Help Groups (SHGs) Networks of the Poor • 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 Block Committee • 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

35. The Strategic Interventions Required

37. Strategic Intervention to Ensure Better Return to the Primary Collector Export NTFP Local Trader/ Manufacture Big Trader/ Manufacture NTFP Consumer A Bargained transaction Local Processing Collector NTFP NTFP [Size of circle depicts the value of NTFP] [Curved Arrows depict the financial flow]

38. 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

39. 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 non-destructive harvesting

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

45. Thank You.