Compulsions and Options
Relating to Livelihood Alternatives of the Poor in the Forestry Sector in Orissa: An Analysis

Rekha Panigrahi

Paper presented at the conference Livelihoods and Poverty Reduction: Lessons From Eastern India, 25-27 September 2001, by Rekha Panigrahi, Vasundhara, Orissa

Contents

Introduction
Methodology
Livelihood Support system of Tribals
NTFP and Rural Livelihood
NTFPs and State Revenue
NTFP Policy and Livelihood Alternatives of Poor
The Policy vis-à-vis Ground realities

References
Annexure I
Annexure II
Annexure III
Notes

Introduction

Orissa is situated in the East Coast of India. It comprises 4.74% of India's landmass and the population of the State is 36.71 million people approx. (Census of India, 2001, Provisional). Of the total population Scheduled Caste and Schedule Tribes constitute 16.20% and 22.21% respectively. The Scheduled areas cover nearly 45% of the total geographical area of the State and major portions of these areas are hill tracts covered with forests where Non-Timber Forest Products (NTFPs) form an important source of subsistence and livelihood in the tribals’ life.   Again, at a time when agriculture has become a losing proposition, where output fluctuates violently from year to year along with frequent droughts, NTFPs have sustained not only the tribals but also other forest dependent communities in the State. But popular estimation strangely overlooks the strength of NTFPs in combating poverty and food crisis. Thus, not only in Orissa but in the entire country poverty alleviation programmes has a land bias approach i.e., it aims at increasing the agricultural production and income generation activities centering agriculture but doesn’t give due importance to occupations relating to collection, processing and marketing of NTFPs. Here it may be noted that given the large-scale land alienation process in Orissa this kind of parochial approach fails to resolve the poverty issue on a long-term basis. 

Now looking at the macro economic profile of the State, the percapita availability of cultivated land, which was 0.39 hectare in 1950-51 has declined to 0.18 hectare in 1998-99. According to Planning Commission nearly 48.6 percent of the people of the State live below the Poverty Line. And, the per capita income of the State is the lowest among the States except for Bihar, the gap between the per capita income of the State and the National average has risen from Rs 316 in 1980-81 to Rs 648 in 1991-92 and to Rs 1292 in 1996-97 (White Paper on State Finances, Finance department, Govt. of Orissa, 1999-2000).

In such situations Forest Produce and NTFPs in particular has all along been a vital source of subsistence and livelihood for the rural poor and tribals in the State. Again, it may be noted that the collection of NTFPs acquires special importance as most of them generate income and food for the poor households in the leanest season. According to one study about 15% of the forest dwellers take NTFP gathering as their main occupation and about 34% take it as a subsidiary occupation. (Livelihood of Forest Dwellers & NTFP Policy in Orissa – A study & Policy analysis of Orissa Drought Action Forum, 1996).

Methodology

The present paper relies on secondary data collected from various published sources and is also based on the primary research carried out by Vasundhara as a part of DFID funded project on Livelihood in Western Orissa. The study was done in four villages in Bolangir and Nuapada districts of Western Orissa which aimed at assessing the critical importance of NTFPs for the livelihood of the poorest and esp. the landless, understanding the policy and market constraints restricting the access of poor to the full potential offered by these NTFPs and analyzing how these constraints can be eased out.

The study covers two districts of Orissa i.e. Bolangir and Nuapada. In Bolangir and Nuapada districts the forest coverage is approximately 13.32 % and 33.69 % of the total geographical area respectively.  These two districts were selected not only on the basis of the presence of forest but also on the basis of other important indicators of development like percentage of people below poverty line, dependence on forest products, development of agriculture etc. From each of the selected districts two villages were identified to collect primary information. The villages were selected on the basis of two important criteria, they are:

1. Proximity to forest area

2. Availability of NTFPs from close by forests.

These two criteria were adopted on the basis of the presumption that proximity to forest and availability of NTFPs positively influences the dependence on NTFPs. Further, other criteria like distance from tribal composition of population, geographical locations in terms of covering the major zones, approachability / accessibility factor, distance from urban centre and the inter-state border were given importance in selection of the villages. (For detailed characteristics of the study villages please see annexure I)

As regards the field study participatory rural appraisal (PRA) method was adopted. In each village the villagers were asked to develop their own method of stratifying the population to capture the dependence on NTFPs. In two sites in Bolangir district people evolved wealth-ranking exercise and accordingly stratified the village. However, in the other two sites in Nuapada district people stratified the village on the basis of sources of livelihood and degree of dependence on agriculture. This difference in approach though is important to note from academic perspective but has little bearing on the overall analysis. Then from each strata in each village sample households were drawn on random basis and detailed information pertaining to their socio-economic and political aspects were collected through personal interviews, questionnaire and small group discussions. Again, for the village as a whole PRA techniques were used for enlisting social and resource mapping, timeline, problems in NTFP availability, processing and marketing etc.

The present paper relies on the data collected through the aforesaid method from the selected villages.  In addition, the paper has used information generated through the policy research work of Vasundhara. Like in case of [1]Kendu leaf (KL) and also for other NTFPs the base materials were collected from the policy research study of Vasundhara.

Livelihood Support system of Tribals

The tribal livelihood is primarily dominated by natural economy, where market plays a minimum role. This is not to say that the market has not penetrated into their system, rather especially in last 50 years because of various developmental efforts tribal system has come under the domain of market economy. This has resulted in gradual degradation of their resource base i.e. their control and access over land, water and forest.

In many places because of development projects and also due to the operation of formal as well as informal land market tribals have lost control over land. Again, due to the peculiar process of development their control over water resource is on decline. They have come to a situation where they are in possession of sloppy lands (most of the situation it is viewed as encroachment though they are enjoying these lands for quite a long time). The productivity of these lands is low and the agriculture is subsistence oriented.

The tribal socio-economic system is close to forest. Their culture as well as livelihood support system is closely linked with forest. From the forest the tribals collect timber for house construction, fuelwood, wild tubers, leafy vegetables, mushrooms and different kinds of NTFPs.  Definitely a part of them is exchanged for meeting the cash requirement of the household but most importantly a major portion is used for consumption purpose. The part that is exchanged in the market for meeting the household requirements is normally made through at the doorstep or in the village haat/market. These commodities are exchanged for other essential commodities or sometime for cash. The merchants are petty traders at the village level, who pay unfair price to the households. In a sense the market is highly exploitative.  In the whole process if we see the role of the tribals they are treated as collector of these produces not their owner.  The state is viewed as the owner of forest and its produces. Keeping this spirit in mind the state introduced various mechanisms, which have limited the access and control of tribals on forest.

It is estimated that in tribal areas more than 60 percent of the households depend on forests for incomes ranging from 25% to 75% every year. Thus looking at the importance of NTFPs on the lives and livelihood of poor tribals the Roy Burman Committee, that was set up by the Planning Commission on Forests and Tribals in India headed by Prof. B.K. Roy Burman, has recommended that collection of Minor Forest Produce (MFP) for food and cash income should be conceded as the right of the tribal families without restriction.

NTFP and Rural Livelihood

As mentioned above NTFPs play a crucial role in rural livelihood. It not only supports their consumption requirement but also play a crucial role in providing employment and income during the leanest season. This section focuses on the nature of dependence of poor households on forest in four villages of Bolangir and Nuapada districts (is based on the study done by Vasundhara in 1998). To substantiate the findings information has also been borrowed from studies carried out by other organisations/individuals.

The study villages are heterogeneous in the sense people from various caste groups reside. The landholding pattern is skewed and there are a substantial section of landless households in these villages especially belonging to SC and ST. For analytical purpose the households have been divided into five categories i.e. landless, marginal farmers, small farmers, medium farmers, big farmers and their dependence on NTFPs have been looked into. The following are the major findings of the study (see annexure II):

• The contribution of NTFPs to the poorest households income range between 15% to 50%. 

• In all the villages it was observed that NTFP collection was a major economic activity for the households below poverty line. It can be seen from the Table I that with the increase in size of landholdings the dependence on NTFPs is declining. For e.g. in Kandrabhatta village the average income from NTFPs moves down from about 2287 rupees in case of the landless to 1927 rupees for marginal farmers and then down to 1016 rupees for the small farmers.
• However, simultaneously it can be observed that the income from two major NTFPs i.e. Mahua flowers and Char increases with the size of landholdings. This is because the large landowners are able to harness these produces from the trees in their private lands.
• A significant fact is that in terms of income covered from NTFPs women’s role is more compared to men as women do most of the NTFP collection. For e.g. on the whole Women (including girl children) composed 88% of the Kendu leaf collectors in the study villages.
• The role of NTFPs in enhancing economic equity is also strengthened by the fact that for the most disadvantaged sections like widows' and old people’s income from NTFP collection is very often the only significant income source.
• Another important finding is that amongst the major NTFPs like Mahua flower/seeds, Char, Tola, Mango available in the study villages KL plays the most important role in supporting household income particularly that of landless and marginal farmers.

Similarly, according to the study carried out by Dr. Radhamohan Mallick in undivided Koraput and Kalahandi districts the poor particularly the landless labourers and marginal farmers derived the largest share of their total income from forest products. The study further reveals that dependence on NTFPs is distinct and visible varying from 27 percent in undivided Koraput district to 52.2 percent in undivided Kalahandi.

Since KL plays an important role in supporting the livelihood system of the poor as found in the study a special section is devoted to KL.

Kendu Leaves as an important cash income produce: Among all NTFPs KL plucking is one of the most important source of livelihood for the poor particularly in the Western and Central parts of Orissa, i.e. Bolangir, Sambalpur, Kalahandi, parts of Koraput, Angul, Sundergarh, Keonjhar and Phulbani districts. It is important to mention that some of these districts are the poorest districts in the country and is largely inhabited by scheduled castes and scheduled tribes. The districts are affected by recurrent droughts with high degree of migration, food insecurity and even starvation. During the summer months in the absence of other employment sources, KL is one of the few sources of liquid cash to the poor.

KL generates about ten million person days of work during the lean summer months for lakhs of tribals and Dalits (Potential of KL collection and poverty alleviation in Orissa, Vasundhara, 1998). Again in the study villages it was found that average household (HH) earnings from KL leaves plucking ranged from Rs 600 annum to Rs 1586/- per annum. A comparative study of contribution of KL to household income and contribution of income from paddy and NTFPs was done. (please refer annexure III)

The main findings are:

• The contribution of KL in the household income and particularly that of landless households is significant.
• Dependence on KL decreases as one moves up from landless to big farmers households.
• The percentage of KL income compared to paddy income decreases with the increase in landholdings. For e.g. in Maharajore village the percentage of KL to the total income from paddy decreases from 28.24% in case of landless to 28.20% in case of marginal farmers, 19.90 % in case of small farmers and then to 13 % in case of medium farmers and then to 1.95% in case of big farmers.

The study by Nabakrushna Choudhury centre for development studies carried out in two villages in Bolangir and Angul districts in1998, found that, out of the total sample size of 147hh, 51 HH derived 20-40% of their total household income from Kendu leaves collection. Further the study points out that KL collection accounted for more than 20% of the total income of the HH with an annual income below Rs. 5000/annum, more than 17% of income of HHs having income between Rs 5000-10000 annum and more than 10% of income of households having income between Rs 10000-Rs 15000 annum in these two villages. All these suggest the importance of KL in poor households.

NTFPs and State Revenue

Following tables describe the contribution of forest to the revenue of Orissa and the expenditure incurred by the State on forestry sector.

As can be seen from the above table forest has played an important role in generating revenue for the state. The other notable feature is that the share of forest revenue in the total state revenue is showing a secular decline. This is because till 1990 the State government was able to harness large amount of revenue from timber. This stopped because of Supreme Court’s order in 1990 and subsequent ban on felling of open green timbers. Further, the same table shows that the per capita expenditure on forestry sector has always remain below the per capita revenue from the same source. It indicates the attitude of state towards forestry. In other words the state has always viewed forest as a source of revenue but has not assumed the responsibility of nurturing this resource. 

Table 2: Details of Forest Revenue: (Rupees in Lakhs)

Now an examination of forest revenue from different sources brings out that in 90s the NTFP has played a major role in generating the revenue of the state. Except for one year i.e.  1996-97 its contribution ranges between 70-89 %. This shows the increasing importance of NTFPs in the state economy.  

It is evident from the table that the contribution of NTFP revenue to forest revenue is significant. Taking the case of KL alone, the profits from KL to the state government has ranged from Rs 47.62 crores to Rs 122.79 crores in the last ten years (Profits are calculated after deducting all the costs incurred in the KL production process, including the procurement cost from the KL pluckers). This is about 70 percent of the earning from forestry sources. The total profits thus earned in these last ten years by the State government from Kendu Leaves trade alone is Rs 742.6 crores. The total (Primary) turnover of KL trade in Orissa is in the range of Rs. 150 crores annually.

The following table shows the revenue earned by the State from KL in last 5 years.

[KL Trade in Orissa: State Profits vs. Rural Livelihoods, Kundan Kumar and Neera M. Singh]

It can be seen from the above table that the share of KL pluckers (wages paid to them for KL plucking) as a proportion of the profits to the State govt. ranges between 10% to 68%. In other words, it signifies that in the production process of KL, for every Rupee paid to the Primary producers (i.e. the KL pluckers), the State obtains a profit of Rs 1.50/- (1993-94) to Rs 9.00/- (1989-90). At an average, since 1989-90, the ratio has been Rs 3.00 as profits to the State for every rupee paid to KL pluckers. The importance of KL in State revenue can be judged by the fact that in the last ten years, the State Government has earned a profit of Rs 742.76 crores from KL, while the total wages to the KL pluckers during the same period has been only Rs 276.63 crores.

NTFP Policy and Livelihood Alternatives of Poor

Prior to March 2000 the NTFP policy of the State was revenue based and control oriented. The State to protect its revenue interest had taken complete command over certain commodities like Bamboo, KL and Sal seeds. For the rest NTFPs it was giving lease to Private parties/Corporations and in the process created monopoly interest. This policy of the State favoured the traders/merchants/moneylenders and industrialist interest along with its own. As a result the marginalised section who critically depend on NTFPs were exploited and never got the fair price for their produce. This policy of the state presumes that State is the owner of forest and its produces.  In late 80’s and 90s there was strong criticism against this policy orientation. As a result of concerted efforts by the people at different levels the NTFP policy was changed in March 2000.   

The new policy is a significant departure from the old one in the sense that it recognises the critical importance of NTFPs in the livelihood of tribals and the rural poor, and seeks to give primacy to welfare of forest dependent poor over revenue objectives of the State. Further, it seeks to decontrol NTFP trade and encourage competition for NTFP procurement by conferring rights over 67 NTFP items to Gram Sabha as opposed to the erst-while policies of monopoly leasing. Again, the Policy document says that such changes have been brought about in pursuance to the provisions of PESA.

• Conceptual problem: The resolution categorises forest produces/MFPs into three groups i.e. Specified Forest produces (KL, Bamboo and Sal seeds), NTFPs (this includes 60 items along with seven tree based oilseeds) and MFPs or leased barred items (basically includes various barks, tubers and medicinal herbs). In a sense the State presents for the first time a definition of MFP and also simultaneously has attempted the NTFP concept to its fold. This classification has no scientific validity. More importantly, implicit to this classification is the revenue interest of the state. It comes out clearly when one examines the list of items included in the NTFP. It has included those items, which are “low value” forest produces. Of these only 5 to 6 the people collect items on a significant scale. On the other hand the State still preserves its right over the items, which provide significant revenue to its coffer. Take the case of KL, bamboo etc. In a nutshell the classification only re-establishes the control of the State over forest produces by safeguarding its revenue interest and hoodwinks the forest dependent poor.
• The State covertly makes the distinction between minor forest produce and NTFP and uses the unilateral definition to deny the forest dependent poor of their rights over the MFPs. Moreover, the definition has been kept open; to include products as the State might decide from time to time in future. Thus, as the commercial value of other products currently in the MFP list increase, the govt. can bring it under its fold.
• Rights over NTFPs in Reserved Forests and Protected Areas: Gram Sabhas have been denied rights over NTFPs from reserve forest areas. Again customary rights of natural inhabitants of areas coming under Wild Life Sanctuaries and National Parks have been totally ignored. The resolution mentions that Gram Panchayats would not be able to lease out NTFPs from Reserve Forest (RF), Protected Forest, but does not specify if the Forest Department would have the rights to allocate procurement rights for NTFPs in R.F.
• Nationalised NTFPs:  The resolution is silent about bamboo, Kendu leaves and Sal seeds, presently Nationalised NTFPs. These have been kept outside the purview of the resolution in the pretext that well-laid down policies exist for these. As a consequence of these "well-laid-down policies" 10 solvent extraction plants in the state have been closed down, sal seed prices have been depressed for years; and Orissa Kendu Leaf pluckers get lowest wages/ remuneration as compared to other states, despite our leaves being of better quality.
• Kendu Leaves: Kendu Leaf  (KL) collection is an important source of livelihood for about 20 lakhs KL gatherers in the State. A majority of the KL pluckers are women, and most subsist below the official poverty line. Major parts of the profits from the KL trade are retained by the State at the costs of fair incomes to the poorest of the State.  The major concern is that the profits earned by the State from KL should be ploughed back to the pluckers who are the actual owners of the produce.
• The resolution has provisions for excessive departmental control over NTFP trade. Provisions such as target-fixation etc. are against the spirit of free trade; also reasonable control with DFOs for ensuring ecological sustainability can give “unreasonable powers” in their hands.
• Lease-barred NTFPs: The policy talks about sustainable harvest of NTFP items such as Tassar Cocoons, Sal leaves that can have adverse impacts on the tree-health without taking the livelihood interest of poorest into account. The policy also doesn’t talks about Lac and it is a restricted item.
• There has been no change in the related Acts and Policies like Excise Act, Sales Tax Act etc. which creates problem at the implementation level.
• Pricing: Though the policy aims at providing fair prices to the people it talks little about the mechanism. The State puts the responsibility on the Panchayat institutions without developing a frame and even caring to build their capacity. As regard to price fixation policy it is wage labour oriented. The price fixation mechanism has no provision to consult the actual gatherers of NTFPs who in fact are the owners of these produces.
• Role of Panchayat: Though the policy says that Panchayat are the owners of the NTFPs but in reality they have been given rudimentary role with regard to the trade of NTFPs i.e. registration of traders on payment of specified fee. Thus, its role in practice is nominal. Again, till date these institutions have not been informed properly of their role. From our field observations we have found out that many Panchayats are not able to discharge their responsibilities in a fair manner. Rather in situations their role have run in favour of the traders.   

The Policy vis-à-vis Ground realities

The State government’s promise about giving the primary pluckers/gatherers a better deal through a new NTFP policy has turned hollow. At the ground level the policy is yet to take effect, the promises given by various state agencies (like [3]TRIFED) has mostly remained in pen and paper.

Our interaction with the various actors like Panchayati-Raj functionaries, primary gatherers, activists and local NGOs in different districts reveals the following ground realities:

• In certain Panchayats, traders have come forward to register themselves. Such registration has occurred for a few products, which have demand in the market, like Mahua, Tamarind, Aonla(Amla), Broomstick, Char, Tola (Mahua fruit) etc.
• At the village level multiple buyers system has failed to come up. The old traders and their networks still continue in the NTFP trade. Thus in most situations the primary gatherers are left with little option to sell their produce.
• In the market there is a dominance of unregistered buyers and the registered buyers are very few. Like in Kalahandi and Nuapada district most of the buyers are unregistered.
• The Panchayat bodies have failed to impose the provisions of registration due to the prevalence of corruption, fear that the imposition may drive away the buyers from the market. In fact, in most cases the buyers are part of the old network in the trade.
• In certain Panchayats registration system has been used to the advantage of the buyers like the registered buyers are not buying and at the same time not allowing others to enter the market. This is creating a glut in the market and forcing the price downward. Then they are buying at the lower price.
• In the whole season the prices of most of the NTFPs has remained below the minimum procurement price. In this situation the Panchayat as per the provision of the policy should have intervened and cancelled the registration of the traders. But nowhere such cases have been noted down. On interaction, the PR representatives noted that such an action in their part would have driven away the traders from the market. In such a situation Panchayats do not have the resources to invest and buy from the primary gatherers. Thus, they did not interfere.
• One positive effect of this policy is the slow but steady involvement of SHGs in trading NTFPs. To illustrate in Ramgiri and Raygada blocks of Gajapati district 102 SHGs are involved in NTFP trading. This process is facilitated by a local NGO.. They have been earning profit from this trading. This year one SHG from the village S. Palam of Gandahati Gram Panchayat have earned a net profit of Rs. 10,300 from Tamarind trading in compared to Rs. 3500 when it was under Govt control.

On the whole it can be concluded that though NTFP has a major role in supporting the livelihood system of the rural poor till date the orientation of the policy is towards revenue. Coming to the present policy it has failed to translate its objectives primarily because of various reasons like the inherent contradictions within it, problems within the Panchayati-raj system and limited power endowed to Panchayat, insensitiveness towards the structural problems relating to the market and absence of proper implementation mechanism.

[PS: Very recently, on 9^th July 2001 the Govt. of Orissa has abolished the State price fixation committee through its resolution no. 20665/SSD/BBSR, 9^th July 2001 by SC & ST Development Department and has empowered the Collectors to fix the Minimum Procurement Prices of 67 NTFPs in consultation with District representatives of various govt. departments. This seems to be an interim arrangement till proper amendments are made into the Orissa Gram Panchayat Act, 1960 and Orissa Timber & Other Forest Produce Transit Rules, 1980. After doing so the GP will be given the responsibility to fix the prices. Here it may be noted that as the market price is always remaining below the Minimum procurement price fixed up by the State the exercise of fixing MPP has become meaningless to the poors. Thus time has come to develop proper enabling mechanisms so that the control of buyers in the market is reduced and the primary gatherers get their due. One such option is introduction of Minimum Support Price with budgetary support for the NTFPs. The others could be focussing on developing processing, storage and marketing facilitation at grass root level.]

References

State of Orissa’s Environment – A Citizen’s Report, Council of Professional Social Workers (CPSW), Bhubaneswar, 1994.

Forest Dwellers and Non-Timber Forest Produce Marketing: A Study and Policy Analysis, Orissa Drought Action Forum – Advocacy Cell, CPSW, 1996.

Orissa Forest 1999, Compiled by Statistical Branch Office of the Principal Chief Conservator of Forests, Orissa.

Procurement and Marketing of Kendu Leaves in Orissa: A study of economic deprivation and benefits to primary collectors, R.M. Mallick, Nabakrushna Choudhury Centre for Development Studies, Bhubaneswar, Orissa.

Kendu Leaves trade in Orissa: State Profits Vs. Rural Livelihoods, Kundan Kumar and Neera M. Singh, 2000.

NTFP for Livelihood: An approach to Policy advocacy (Draft report), Regional Centre for Development Co-operation, Bhubaneswar, 1999.

White Paper on State Finances, Finance Department, Government of Orissa, 1999-2000.

Economic Survey 1999-2000, Government of Orissa. 

Annexure I

Annexure II

Annexure III

(HHs: Households, MF: Marginal Farmers, SF: Small Farmers, MedF: Medium Farmers, BF: Big Farmers)

Notes