Mechanism for Marketing of Minor Forest Produce through MSP and Development of Value Chain for MFP

What is the MSP for Minor Forest Produce scheme?

The Mechanism for Marketing of Minor Forest Produce (MFP) through Minimum Support Price and Development of Value Chain for MFP is a centrally sponsored scheme of the Ministry of Tribal Affairs, introduced in 2011 and operational from 2013-14. The scheme gives tribal gatherers a guaranteed floor price for the forest produce they collect, so that they are not forced to sell to local traders at distress rates.

According to TRIFED, the national nodal agency for the scheme, the programme started with 10 MFP items across 9 states covering roughly 1 lakh tribal families. Today the scheme covers 87 MFP items across 22 states and touches about 25 lakh families. The expansion happened in stages to 23 additional items were notified in 2020 and 14 more were added in 2021.

Minor forest produce means all non-timber forest produce of plant origin: tendu leaf, mahua flower and seed, sal seed and leaf, honey, tamarind, chironji, gum karaya, myrobalan, lac, bamboo shoots, wild fruits and similar items. For crores of forest-dwelling families these are not a hobby; they are the cash income of the lean months between crops.

Key objectives

• Provide a social safety net to forest dwellers by guaranteeing a minimum support price for notified minor forest produce.
• Break the dependence of tribal gatherers on local middlemen who set arbitrary prices at the forest edge.
• Build a value chain; storage, primary processing, grading, packaging and marketing, so that more of the final price stays with the collector.
• Improve the bargaining power of gatherers by clustering them into self-help groups and Van Dhan Vikas Kendras.

Main features

• MSP is declared centrally by the Ministry of Tribal Affairs for each notified item and revised periodically.
• Procurement is done by a State Level Agency (SLA) appointed by each state government, with TRIFED coordinating nationally.
• The ministry provides revolving/working capital funds to state agencies; according to TRIFED, about Rs 319.65 crore has been released or sanctioned to 18 state procuring agencies for this purpose.
• Any loss on procurement is shared 75:25 between the Centre and the state.
• Scheme funds also support haat bazaars, godowns, warehouses and value-addition infrastructure in tribal areas.
• The Van Dhan Vikas Kendra programme, launched on 14 April 2018, is a component of this same scheme.

Who is eligible for the MSP for MFP scheme?

You can sell at MSP if:

• You are a tribal gatherer or forest dweller who personally collects notified minor forest produce.
• The produce you bring is on the list of 87 notified MFP items for which an MSP has been declared.
• You live in one of the 22 states where the scheme is operational and where a state implementing agency has been appointed.
• The produce meets the quality and moisture specifications laid down for that item: MSP is paid on fair average quality, and heavily damaged or wet produce is rejected or down-graded.
• You are a member of a Van Dhan Vikas Kendra self-help group, if your state routes procurement through Kendras rather than individual purchase.

You cannot apply if:

• You are a trader, commission agent or middleman buying produce from collectors for resale. The scheme pays the primary gatherer, not the trade.
• Your produce is timber or a forest product not on the notified list — MSP applies only to the notified minor forest produce items.
• You are seeking a cash grant, pension or subsidy. This scheme is not a direct benefit transfer; money is paid only against produce actually delivered and weighed at a procurement centre.
• You live in a state or union territory with no notified Scheduled Tribes and no implementing agency, where the scheme does not operate.

What documents are required for MSP for MFP?

There is no application form, no fee and no registration number involved in selling at MSP.

How to apply for the MSP for MFP scheme

Selling at the minimum support price is a physical, over-the-counter process.

1. Check the current MSP rate for the item you have collected on trifed.tribal.gov.in, or on the notice board of your nearest haat bazaar or forest range office. Rates are revised periodically, so use the latest notification.
2. Locate the nearest designated procurement centre or haat bazaar run by your state implementing agency: usually the state minor forest produce federation or tribal development corporation. The forest range officer, gram panchayat or Van Dhan Kendra can tell you where it is.
3. Clean, dry and grade the produce before you carry it. MSP is paid on fair average quality; excess moisture and foreign matter reduce the weight accepted or lead to rejection.
4. Take your Aadhaar card and bank passbook along with the produce, and hand it over at the centre for weighing and grading.
5. Collect the purchase slip or receipt showing the item, weight, rate and amount payable. Keep it. This is your proof if payment is delayed.
6. Receive payment from the state agency in your bank account, or in cash where the state permits it at the counter.

If your state routes procurement through Van Dhan Kendras, join the local Kendra's self-help group first and sell through it; the Kendra aggregates produce from members and deals with the state agency on their behalf.

How to join a Van Dhan Vikas Kendra

1. Ask the district tribal welfare officer, the state implementing agency or the TRIFED regional office where the nearest Van Dhan Vikas Kendra is.
2. Enrol in one of the Kendra's self-help groups as a member gatherer.
3. Attend the training on collection, primary processing, grading, packaging and hygiene delivered under the scheme.
4. Sell your collected produce through the Kendra, which handles value addition and marketing and passes the proceeds back to members.

How much does the MSP for MFP scheme pay?

The scheme does not pay a fixed amount per person. Payment equals the notified MSP per kilogram for the item, multiplied by the quantity accepted. Rates vary widely by item, a kilogram of honey, gum karaya or chironji carries a very different MSP from a kilogram of mahua flower or sal seed.

According to TRIFED, the scheme has expanded from 10 items and 9 states in 2013-14 to 87 items in 22 states, and the ministry has released or sanctioned about Rs 319.65 crore as working capital to 18 state procuring agencies. Because the MSP list is revised, always confirm the rate for your item on the TRIFED website before selling rather than relying on a figure quoted by a trader.

Why the 75:25 loss-sharing matters

A guaranteed floor price only works if someone absorbs the difference when the market price falls below it. Under this scheme, any loss on procurement is shared 75:25 between the Centre and the state. That arrangement is the reason a state federation can keep buying at MSP in a bad year, and it is the single most important design feature of the scheme for a gatherer.

Common problems and how to handle them

• The centre is not buying. State agencies procure seasonally, item by item. Confirm the procurement window with the range office before travelling.
• The rate offered is below the notified MSP. Ask for the written purchase slip and raise the matter with the district manager of the state implementing agency; quote the item and the notified rate.
• Payment has not reached your bank account. Keep the purchase slip and take it to the same procurement centre; most delays are traced to a wrong or inactive account number.
• Produce rejected on quality. Ask the grader to record the reason on the slip. Excess moisture is the most common cause and can be avoided by drying the produce properly before delivery.

Help and grievance redressal

• TRIFED head office, New Delhi: 011-20883014
• TRIFED regional offices: contact details are published on trifed.tribal.gov.in
• State implementing agency / state minor forest produce federation, the first point of contact for rate, weighment and payment disputes
• District Tribal Welfare Officer for scheme-level complaints
• CPGRAMS (pgportal.gov.in) for a written grievance with a tracking number

Selling at MSP is free. No agent, trader or official can charge a commission for letting a gatherer sell at a procurement centre.