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Multi stakeholder consultation for defining “micro enterprise friendly forest governance”
3rd and 4th May 2007 in Hyderabad

 
Organizers: AP Forest Department & FGLG India
Background Note
Dr.D.Suryakumari
 
Micro enterprise development using forest produce as raw material, in the forest fringe villages seem to be the most suitable option for the enhancement of livelihoods of the forest dwelling poor tribal and other communities. Because, in India, around 200 million people living in the remotest parts of the country survive on the subsistence agriculture and forest gathering. They earn cash income by selling NTFPs (with out any processing) on a daily/weekly basis in the nearest market places either to the State owned corporations or to the traders. In the recent years, it has been noted that the growth of export of NTFP based products is between 5-15% annually, with an average at 11% while the primary producers continue to remain poor.

Currently the enterprises based on forest produce are located distantly and owned by private entrepreneurs. Thus, the profits generated from out of value addition to the forest produce are not reaching the communities. Even the State owned corporations limit their transactions to procure the produce from the primary collectors and arrange for forward sale of the same through auctions. Naturally, the owners of medium or large enterprises participate in the bids and procure the produce in bulk quantities. Neem, Mahua, Gum, tamarind, amla, to name a few and a variety of medicinal plants are being traded in this way across the country from the forested areas. In such a state of affairs, the poor forest dependent/dwelling communities remain poor eternally and spend their energies to collect the forest produce to get those small returns and in the process contribute to the generation of wealth for the remote players.

The National forest policy 1988, subsequent JFM guidelines of 1990, 2002&2004 and the JFM resolutions of almost all States, the PESA and the current Forest Rights Act,2007 – all of the legislations and directives of the National and State Governments have been highlighting the need for making forest dependent people partners in the development and management of forests. Still, the situation remains more or less the same.In recent times, there is also an argument that Public Private Partnerships have to be encouraged to improve the situation and attract investments for establishment of forest based enterprises.

In the above background, it is imperative to look into the practical issues before developing strategies. It is a matter of great significance to find ways and means of retaining the bio mass related to forest produce, nearer to the location from where it is collected. Two simple examples can explain this further. i) Neem seed – when neem seed collected is transported to remote areas for processing, the native people/farmers are deprived of the cake (by product of oil extraction) and other waste material, which can effectively be used as organic pesticide by the farmers in the vicinity which will reduce their investment costs also. The other is – Mahua, when its seed is sent out, local people are deprived of the benefits from the cake which can be used as organic fertilizer and also traditional mosquito repellent. The other practical point is that given the levels of literacy and organization among the primary collectors, expecting them to become full pledged individual entrepreneurs dealing with the business of forest produce (with or with out value addition) in the near future is highly impossible.

In this situation, what seems to be practical is – promotion of micro enterprise development at the village level by the communities who collect the produce. Organizing them into groups and providing them with required skills/tools/follow up guidance/support services/linkages will work in the interest of the poor and their income levels can be raised considerably. In order to make this work, the concerned state agencies have to establish appropriate structures /systems and institutional arrangements. A set of related actions need to be taken and coordinated by the Government to facilitate marketing of the products developed through micro enterprises.

Value chains of each of the forest products that have some commercial value need to be studied (and/or existing information be compiled/collated) and the stages that can be handled at community level through micro enterprises have to be identified. More people can be involved in such activities at the village level, providing gainful employment for a certain period.

This course of action necessitates the initiative by concerned Government departments/Ministries to create a structure that - looks into all aspects related to the promotion and development of forest based micro enterprise including interstate coordination and also, ensures sustainability and involvement of local communities in the management of the resources being used in the enterprises.

What are the issues of forest governance that require special attention in this regard, what roles each of the stakeholder groups can play to promote forest based micro enterprises, what practical measures can be taken to make the next step in the desired direction are the subjects for discussion in the foregoing consultation by all stakeholders.