An invited presentation on Community Led Forest Based Enterprise (CFE) -Policy Trajectories in Odisha: Contribution of Bilateral Project in Mainstreaming & Strengthening CFE - Case of OFSDP, made at a National Workshop on Opportunities, Strategies and Challenges in Developing Community-led, Forest-Based Enterprises, organised by UNDP, CEE and MP Forest Department at New Delhi on 16 Dec 2014.

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

2. • 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

3. 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

4. • 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

5. • 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

6. • 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

7. • 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

8. 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

9. 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

10. IGA in OFSDP
Highlights

11. 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

12. 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

13. 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

14. 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)

15. 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

16. 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

17. 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

18. Thank You

19. 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