community led forest based enterprise (cfe) policy trajectories in odisha & ofsdp experiences

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Community Led Forest Based Enterprise (CFE) Policy Trajectories in Odisha Contribution of Bilateral Project in Mainstreaming & Strengthening CFE Case of OFSDP

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Community Led Forest Based Enterprise (CFE) Policy  Trajectories  in  Odisha  

Contribution  of  Bilateral  Project  in  Mainstreaming    &  Strengthening  CFE  -­‐  Case  of  OFSDP  

 

•  Largest  number  of  forest  fringe  villages  (29,302)  in  the  country  (57%  of  the  total  villages)  

•  Over  80%  of  forest  dwellers  depend  enDrely  on  NTFP  in  the  state;17%  landless  depend  mainly  on  NTFP  collecDon  and  39%  people  are  involved  in  NTFP  collecDon  as  a  subsidiary  occupaDon  (Negi,  1993)  

•  >60  %  of  the  households  in    its  tribal  areas,  depend  on  forests  for  incomes  ranging  from  15%  to  50%  every  year.  (Vasundhara,  2005)    

•  About  1/4th  of  the  total  income  of  a  forest-­‐fringe  household  in  Orissa  comes  from  NTFP  collecDon.  (OFSSP,  2006)  

 

Odisha  &  NTFP  High  Dependence.  High  availability  

Policy  Contexts  Legal  &  Institutional  Framework  

1.  Post-­‐independent  Policy  Regime,  pre-­‐2000  •  Limited  Space  of  CFE  

2.  NTFP  Deregulation  in  Odisha  •  Opened  the  Space….Absence  of  Enabling      

3.  Influence  of  JICA-­‐Policy  (2nd  Generation  Forestry  Projects  in  India)  on  CFE  

•  Fund,  Partnerships  and  Flexibilities  brought  in  Innovation  and  Handholding  …but  new  challenges  came  up…  

4.  Policy  Gaps  and  Challenges  

•  State  Control  •  Orissa  Forest  Produce  (Control  of  Trade)  Act,  1981,  state  monopoly  for  

control  and  regulaDon  of  trade  in  NTFP  •  Leases  to  industry/traders/Contractors  (Utkal  Forest  Product  Ltd  –  lease  of  

29  items  for  10  years  1989-­‐99)  

•  Bamboo  :  Industry  as  Labour  Contractor  –  1989-­‐2000;  OFDC  since  2000  

•  Sal  Seed  :  OFDC  &  TDCC  -­‐  1983-­‐1995    and  a^er  2000;  Leases  to  Oil  mills  during1995-­‐2000    

•  Other  NTFPs  •  Till  1985;  leases  to  TDCC,  AMCS  &  OFC  who  used  to  act  as  renDers    •  1985–2000  :  lease  to  private  parDes  and  industries      •  State-­‐  or  district-­‐level  commi`ee  fixed  the  price  for  each  item  •  1949  -­‐2000  in  Phulbani  lease  to  AMCS  ,  Tikabali  

Pre-­‐NTFP  deregula6on  :  State  Control  Space  for  Contractors,  Industries,  Coopera6ves    

•  Policy  guideline  in  2000    •  DenaDonalizaion  of  68  NTFPs  •  Ownership  rights  to  the  Panchayat;  Transport  and  trade  under  PRI  

•  Three  types  of  NTFP  (about  85  in  nos)  •  69  deregulated  NTFP  (with  Sal  seed;  highest  no  among  Indian  states)  •  Na6onalised  produces  like  Kendu  leaves  &  bamboo  are  directly  controlled  by  

Govt.    •  Lease-­‐barred  items    :  Sal  leaves,  gums,  resins  and  barks  of  different  trees,  

Neither  put  to  free  trade  nor  are  kept  under  control  of  GPs,  as  collecDon  of  these  items    considered  to  have  adverse  impact  on  the  sustainability  of  species  and  forest.  

•  Orissa  Gram  Panchayats  (Minor  Forest  Produce  Administra6on)  Rules  2002  :    •  GP  shall  have  the  power  to  regulate  procurement  and  trading  of  MFP  

NTFP-­‐Deregula6on    

•  Change  in  Collec6on  Basket  :  %  of  household  engaged  in  NTFP  collecDon  increased  for  11  important  NTFPs  where  as  it  has  reduced  for  8.  

•  Limited  Awareness  :  Awareness  that  trader  should  not  buy  less  than  the  prescribed  Minimum  Procurement  Price  was  11  percent  

•  Increase  in  Price  :  Prices  of  all  the  NTFP  at  the  primary  collector’s  level  increased    

•  Con6nua6on  of  Tricks  of  Trade  :  DeregulaDon  of  NTFPs  has  hardly  brought  any  significant  changes  in  the  age  old  terms  of  trade  

•  Marginal  improvement  in  Value  of  addi6on  of  sleected  NTFPs  

•  Higher  involvement  of  women  SHGs  in  NTFP  business:  A  large  number  of  such  groups  across  the  state  started  NTFP  based  micro  enterprises  –  ORMAS/NGO  

DeregulaDon  Impacts  :  Mushrooming  of  CFE    OFSSP  Study,  2006  

•  Crea6on  of  Market    

•  UFPL  contributed  to  Sal  Seed  use  discovery  in  80s    

•  Export  of  Siali  Buffet  Plates,  bamboo  handicra^s  (ORUPA)  

•  Value  Addi6on  :    

•  Siali  leaf  plate,  hill-­‐broom,  tamarind  deseeding  in  60s  &  70s  (AMCS,  Tikabali  )  

•  Siali/Sal  leaf  plate  sDtching,  moulding;  bamboo  handicra^s  (ORMAS,  TRIFED)  

•  InnovaDve  Processing  :Bamboo  ply,  Tamarind  powder  (OFSSP  Pilot  

•  Collec6viza6on  &  Coopera6za6on    

•  NTFP  Coopera6ves  (Ama  Sangathan,  PRADAN,  Vasundhara)  

•  Producer  Companies  around  NTFP/Medicinal  Plants:  (RCDC  (Mri6ka),  EDI,  Sambandh    

•  Innova6ons  •  Adibasi  Bazar  Commi`ee  (MART-­‐OTELP)  

•  Cluster  and  Value  Chain  Studies  :  (MSME  Founda6on,  Traidcra[  UK,    UNIDO)  

•  OFSDP  Clusters  

Policy,  Market  &  Ins6tu6on  Triggers  

Odisha  Forestry  Sector  Development  Project    (www.ofsdp.org;  2006-­‐15)  

   •  Funded  by  JBIC/JICA  –  Rs  8  billion  

•  Society  Mode  of  Implementation  with  a  Collaborative  Implementation  Framework  –  CSO,  Consultants,  Professional  Agencies  

•  Implemented  through  JFMC  and  SHG  in  2426  villages  in  10  districts    

•  About  2  lakh  ha  forest  treatments,  biodiversity  conservation  in  PA,  Mangrove  regeneration  and  Farm  Forestry    

•  Integrated  Participatory  Projects  :  Microplanning,  EPA,  IGA,  LLI-­‐BHN  

•  Strategic  Integration  of  Convergence,  integration  of  GIS  and  MIS,  Research    

JICA  Focus  on  Livelihoods      2nd  Generation  Projects  

•  Livelihoods  promotion  of  Forest-­‐dependent  Communities  and  Process-­‐based,  Flexible  approach  with  Multi-­‐stakeholder  involvement  of  Projects  lead    OFSDP    to  Adopt  a  Different  IGA  

•  Twin-­‐Objectives  :  Healthy  Forest  &  Wealthy  Communities  •  RF  at  VSS  level,  managed  by  JFMC  –  Community-­‐lead  Microfinance  •  Market-­‐based  approach  with  VCA,  Market  Research  &  Information  Access  •  Demand-­‐based  collective  promotion  through  3600  enabling  •  Cross  Learning  and  Convergence  •  Pioneer  experimentation  around  Clusters  •  Partnering  with  Professional  IGASA  •  Institutionalized  Market  linkage  –  tie  ups  with  Private  Sector  •  Business  Approach  :  5  year  Plan,  Quality  Control  •  Infrastructure  support  –  CFC    •  Internal  and  external  convergence    

IGA in OFSDP Highlights  

Wider  Coverage    More  than  7000  SHG;  More  Than  20,000  Loans    

(2008-­‐14)      

 2,015      2,359      2,990      3,492      3,735      4,501      4,974    

 5,515      5,676      5,990      6,353      6,816      7,002      7,037      7,245      2,461      3,032    

 3,947      4,697      5,115    

 6,486      7,536    

 8,860      9,741      10,657    

 12,229      14,588    

 16,989      18,160      20,331    

 -­‐        

 5,000    

 10,000    

 15,000    

 20,000    

 25,000    

 30,000    

Jul-­‐10   Dec-­‐10   Mar-­‐11   Jun-­‐11   Sep-­‐11   Dec-­‐11   Mar-­‐12   01-­‐Jun   Sep-­‐12   Dec-­‐12   Mar-­‐13   Jun-­‐13   Sep-­‐13   Dec-­‐13   Apr-­‐14  

No  of  Recipients   No  of  loans  

Investment  in  RF  >  Rs  50  Crore  

Repayment  encouraging  

562  

 478    438  

366  

287    234      205      183    

 151      126      97      87      72      52      40      33    

315    254    

 220    173  

116    110      100      89      66      48      42      37      30      19      13      10    

Amount  of  Loan  Linked  Vs  Repaid  (In  Million  Rupees)  

Loan  Amt   Repayment  Amt  

Cluster  (group  of  SHG)  Microenterprise      

•  81  Clusters  with  more  than  11,000  members  from    1039  SHG  (481  VSS);    

•  16  types  of  commodities  

•  75%  of  the  clusters  NTFP-­‐based;  Tamarind    -­‐20  clusters,  siali  leaf  -­‐  14  and  Mahua  –  9,  Sal  leaf  -­‐8  and  hill  broom  –  6    

•  Total  amount  invested  Rs  40.58  million  (RF  support  RS  28.31  million)  

•  Profit  reported  Rs  10.18  million  (25%  return  over  investment)  

•  Clusters  reported  more  than  3  cycles    

Cluster  Price  vis-­‐à-­‐vis  MSP  2014  

NTFP  Products   GoI  Rate  in  Rs/kg   OFSDP-­‐Cluster    marketed  rate  in  Rs/kg  

Mahua   22   24  Sal  Seed   10   10  Sal  leaf   21   14  Char   100   110  Harida  

11  

20.5  Bahada   15.5  Amla   43.25  

Tamarind   22  22  

(deseeded  rate  Rs  45-­‐47/kg)    

IGA  Policy-­‐Framework      IGA  Approach   Focus  

Revolving  Funds    at  Village  level,  managed  by  JFMC  

Community  managed  microfinance  

Income  Generation   Economic  Inclusion  

Focus  on  Forest  dependent,  Poor    &  Weak  WSHG  

 Social  Inclusion  

From  Norming,  Handholding,  Capacity  Building,  RF-­‐support,  BDS  &  Market  Linkage  

Integration/  Holistic  

Linked  to  EPA  &  ANR  &  Convergence   Internalization    

Enabling  demand-­‐driven  &  informed  choices,  Value  Chain  Approach  ,  Market  Information  

Market  &  Information  

Cluster/  Producer  Company,  Formalization  (PAN,  TIN  etc.)  Institutionalized  Linkage,  CFC-­‐

Infrastructure    

Institutionalization  &  Infrastructure  

Policy  Challenges  •  Culture  Vs  Economics  

•  Different  value  system  of  tribal/forest  fringe  communities  

•  Limited  inclination  for  profiteering  and  risk  taking    

•  Nature  of  Commodity  •  Limitation  of  NTFP  as  a  commodity:  seasonality,  market  transparency  and  

development  (monopolistic,  product  diversity,  quality)  

•  Limited  success,  examples  and  institutional  experiences    •  Organically  &  Socio-­‐economically  not  tuned  to  Economy  of  Scale  

•  Bridging  the  Gap  of  Hand-­‐holders  •  Lack  of  qualitative  Rural  market  support  Agencies  and  adequate  supply  of  HR  

•  Supply  Chain  Vs  Value  Chain  Professionals  •  Limited  knowledge  pool  on  product  and  market  dynamics      •  Right  compensation  and  incentive  

Policy  Gaps  •  Limitation  of  some  NTFP  

•  Conflicts  of  a  Forester  :  Lease  barred  NTFP  •  Overcoming  Excise  Barrier  :  Mahua    

•  Scheme  of  MSP  for  MFP  •  Exclusion  of  Protected  Areas  •  Excluded  Products  :  Restricted  Items  (?)  Lac,  Gum,  Sal  

leaves,  nationalized  items  (Bamboo,  KL)  

•  Promotional  Gaps  •  Promoting  use  of  Green  Products  viz.  Leaf  plates    •  Subsidy/incentives  for  Green  consumption/marketing  •  Proactive  linking  of  Institutions,  market  and  entrepreneurs    •  Taxation/VAT/Excise  exemptions  

Thank You

25  July  2013  19  

Tamarind Cluster

No  of  Clusters-­‐  20  /VSS-­‐111  /SHGs-­‐221  

Loan  amt  from  RF:  Rs  107.78  lakhs  

SHGs  Own  Contribution:  Rs  10.03  lakhs  

Total  Investment:  Rs117.82  lakhs  

Total  quantity    mobilized:    7643.45  quintal  

BC    Duration:    3CYCLES  (4-­‐6  month  in  each  cycle)  

Profit      :  Rs.  40.14  lakhs  

Intervention  Areas  

De-­‐Seeding  

Quality  Standardization  

Skill  Training  (De-­‐seed)  

Branding  (four  clusters)  

Trade  Agreement  with  Clusters