Govt set to tweak MSP norms for periodic price hikes of minor forest products

The tribal population in India heavily relies on forest resources for their livelihood. Minor Forest Produce (MFP) includes non-timber forest produce of plant origin like bamboo, canes, fodder, leaves, gums, waxes, dyes, resins, and many forms of food including nuts, wild fruits, Honey, Lac, Tusser etc. The scheme 'Mechanism for Marketing of Minor Forest Produce (MFP) through Minimum Support Price (MSP) and Development of Value Chain for MFP' was introduced in 2013-14 by the Ministry of Tribal Affairs to provide a safety net for these vulnerable communities. The prolonged stagnation in MSP rates, last revised during the COVID-19 pandemic in 2020, highlighted by the Parliamentary Standing Committee on Social Justice and Empowerment, exposes these communities to distress selling and exploitation by middlemen. Rationalizing the MSP and ensuring periodic revisions is crucial for social inclusion and poverty alleviation among tribal populations, directly contributing to the goals of inclusive growth.

The Minimum Support Price (MSP) serves as a market intervention by the Government of India to insure agricultural producers against any sharp fall in prices. Applying this to MFP aims to ensure fair returns to tribal gatherers. However, managing MSP for MFP presents unique challenges compared to agricultural crops. The prices of MFP can be highly volatile depending on market demand and supply gluts. The Ministry of Tribal Affairs aims to address these issues by rationalizing the list of covered items, as some products fetch higher market prices than the fixed MSP, while common products like gum or lac require specific price-fixing mechanisms. TERI's study will focus on developing a robust methodology for determining MSP for various MFPs, considering factors like collection cost, market trends, and value addition potential, which is essential for a sustainable tribal economy.

The effective implementation of the MFP MSP scheme requires robust institutional mechanisms at both the central and state levels. The Tribal Cooperative Marketing Development Federation of India (TRIFED) plays a nodal role at the national level, while state-level agencies are responsible for procurement when market prices fall below the MSP. The decision to involve a research institute like The Energy and Resources Institute (TERI) indicates a shift towards evidence-based policy making. By relying on ground surveys and data analysis to rationalize the MSP framework, the government aims to improve the targeting and efficiency of the scheme. This approach highlights the importance of continuous evaluation and adaptation of welfare schemes to ensure they meet their intended objectives and respond to changing ground realities.