CHAPTER  VI

 

COMMERCIAL ACTIVITIES/OPERATIONS.

 

6.1       One of the objectives of TRIFED is to organise and plan the growth and development of natural products and their trade on rational, scientific and commercial basis in the interest of the tribal population in the country.  TRIFED as an organisation committed to serving the needs of the tribals and contributing to the upgradation of their living standards has aggressively undertaken procurement and marketing of over 80 items of tribal produces, which are environment – friendly, fresh, pure and 100% natural.

 

A.        Commodities/Tribal Produces marketed by TRIFED.

 

6.2       The Commodities that are marketed by TRIFED can be broadly classified into two groups viz., Minor Forest Produce (MFP) and Surplus Agriculture Produce (SAP). 

6.3       The SAP includes Food Grains (Rice, Wheat etc.) Coarse grains (Jowar, Maize, Ragi etc.) Pulses (Urad, Lobia, Channa, Moong, Arhar, Red Lentil, Rajma etc.), Cultivated Oilseeds (Ban Tulsi, Castor, Groundnut, Mustard, Seasame, Soya, Sunflower etc.) and Spices (Cardamon, Chironjee, Coriander, Jeera, Fennel Seed, Fenugreek, Red Chillis, Tej Patta, Turmeric etc.

6.4              The MFPs, includes all Non-Timber Forest Produce except those which are restricted as per the state laws which vary from State to State.  Some of the MFPs are – Amla, Gum Karaya, Hill Grass, Honey, Laham Bark, Mahua Flower, Myrobalan,  Lac, Siali leaves, Tamarind, Tendu Leaves etc.   Since the MFPs are collected and are available only in the forest areas, TRIFED also undertakes value addition activities for MFPs like processing of Tree Borne Oil seeds into Oil and DOC,  Deseeding and Defibration of Tamarind, Binding of Hill Brooms etc. for facilitating marketing.

6.5              Besides TRIFED also market Dry Fruits (Cahsew Nut, Cashew kernel, Dry Amla, Amchur etc),  Horticulture Produces (Ginger, Hops, Potato, Raw Cashew, Raw cane etc.)  Handicrafts (Bamboo crafts, Bell Metal Craft, Iron Craft, Paper Crafts, Terracota, Textiles Made Ups) and Medicinal Herbs (Aswagandha, Bahera, Chirayata, Dhawai Phool, Giloy, Harar, Kalmegh , Nimali etc).

6.6              So far, TRIFED has procured medicinal herbs worth Rs.235 lakhs during 1999-2000.  TRIFIED has budgeted to procure medicinal herbs worth Rs.380 lakhs out of which commodities worth Rs.26 laksh have already been procured.

6.7              The Committee note that one of the main objectives of TRIFED is to identify items of Minor Forest Produce (MFP) in different States to be brought under the ambit of the Cooperative marketing and make recommendations for fixation of minimum prices of such MFP in the tribal areas by each State.  The commodities mainly procured and marketed by TRIFED comprise of Surplus Agriculture Produce (SAP) and Minor Forest Produce (MFP) which includes medicinal herbs and horticulture produces.  The committee are of the view that there are thousands of medicinal herbs and plants and other natural products, which remained, untouched or unexplored.  The Committee, therefore, recommend that more items of MFP including medicinal herbs should be identified and also explore new uses so that more and more items of MFP may be brought under the ambit of the federation for marketing.

 

B.                             Methods of Procurement and Fixation of Prices.

 

6.8       There are no specific guidelines of instructions issued by Ministry of Tribal Affairs on the nature of procurement.  As far as TRIFED is concerned, TRIFED has issued detailed instructions by way of circulars to its branch offices.  These instructions are followed, by and large, and further compliance is checked by a number of inspection and audit programmes.

6.9       The collection of Minor Forest Produce has remained a state subject and the procurement policy is to be decided as per the State policy.  Thus TRIFED undertake procurement and marketing operations in consonance with the State policy.

6.10     In view of the mandate and available resources, TRIFED procures commodities from Village/Periodic Rural Market  (Haat Bazars) and regulated markets under APMC Act, being areas having significant tribal population.  While selecting areas, due consideration is paid to the benefit of tribals and existence of tribal population.  However, among the sellers, the portion of non-tribal is also unavoidable.

6.11     TRIFED with its limited manpower constraints undertakes the procurement operations.  By entering into agreement with member Federations like Tribal Development Cooperative Corporations (TDCC) and Forest Development Corporation (FDCs).  TRIFED also engages District level/Taluka level cooperative Societies, LAMPS/PACS/AMCS/KVSS, Van Suraksha Samitis, Van Dhan Samities etc.

6.12     Presently, TRIFED is also using the extension services of these organisations for various activities.  Recently, TRIFED has also extended market intervention for handicrafts items, artefacts etc.  as in other parts of the country to the North Eastern States.  Apart from above, a number of produces are seasonal in nature in North Eastern State.  So during the harvesting period regular staff are deputed for procurement.

6.13     Besides, these agencies of procurement, there are a number of market functionaries who procure commodities from tribals.  Except, in case of nationalised/monopolised comodities, owned/controlled by State Government or their nominated agents, a significant and substantial quantum of commodities sold by tribals are procured by private parties and the role of TRIFED and other similar agencies is supportive and to maintain a check on the market.

6.14     Unlike TRIFED or other cooperative organisations, the private parties have no commitment to provide a fair and economic prices to the tribal producer for their natural produce. The private trader fully exploits the poor bargaining of the tribal of the primary producer or collector of Agricultural Produce and M.F.P. The reasons for the disadvantage position of the tribal producer is due to remoteness of areas, ignorance of market conditions and practices, and lack of any effective organisation among the tribal sellers. They are further subjected to malpractices such as under-weighment, denial of premium for quality in these transactions. Further, there are traditional and age old relations between the local private traders and the tribals further strengthened by a system of interlocking advance credit to the tribal for expenses to be incurred at the time of festival and occasions which is adjusted against the supply of produce at the time of harvesting which forces the primary producer to sell at considerably lower rates. All the above factors contribute the tilt of the market in favour of the private trader, who is able to procure significant and substantial quantity of commodities grown by the tribals at very cheap rate from the tribal producer.

6.15     Collection and marketing of MFPs being a state subject, the state government does the fixation of procurement price of MFP. In states like Orissa and Bihar the prices are fixed by State Level Apex Committee. In Madhya Pradesh prices for some selected commodities (e.g. Tendu leaves, Myrobalan etc.) are done by the State level Apex Committee while the rate of other MFPs (e.g. Mango Kernel, Mahua Seed, karanj seed etc.) are decided by the district level Committee. In some cases the states also adopted the fixation of the price on the basis of the highest tender bid received for a commodity (e.g. Sal seed in case of Madhya Pradesh, West Bengal and Bihar). Thus, the price fixed for various commodities varies from state to state/area to area within the same state depending upon the state policy.

6.16     In the recent past TRIFED has initiated model system constituting apex committee at the district level which decides the price. This price is worked out on the basis of the rate offered for the commodity in the nearest terminal market. By associating the tribals as a member of the apex Committee the message about the fixation of rate is conveyed to the villages/tribals. Besides, the rates are also announced by loud speakers, displayed through banners, radios, notice board of cooperative societies etc. This enables the tribals to have the idea about the price paid by the middleman vis-ŕ-vis TRIFED thus restricting the tribal from exploitation by the middlemen.                

6.17     TRIFED does not have any standard and quality control board of its own. In undertaking procurement from tribal areas, TRIFED, uses quality specifications laid down by Agmark, I.S.I. etc. As TRIFED is procuring directly from the tribals it is difficult to insist for strict quality specification in view of their background. The quality consciousness is a long term process for which TRIFED can educate the tribal.

6.18     The collection of the produce especially MFPs are done by adopting the age old method of collection and being inherited by the tribals from generation to generation. There are no set parameters/standardised norms to determine the quality of MFPs/TBOs, which are brought to the market yard for sale. Thus, these parameters need to be set after extensive experimentation. In addition the results need to be practically passed on to the tribals/collectors so that they could adopt the same. Considering the range and number of MFPs available/being collected by tribals which is long term process and requires time and also long term capital investment.

6.19     The checking and testing of the commodities are done manually by visual appearance and also through moisture meter for moisture content in case of agriculture commodities. However in case of MFPs like Myrobalan, Tamarind and Mahua Flower etc. it is the visual appearance which is checked. Whereas in case of TBOs, other oilseeds and Lac it is tested at reputed specialised laboratories, like SGS, ITA, LAB, ILRI etc.

6.20     The Committee have been informed that the basic difficulties faced by TRIFED at the time of procurement are non-uniformity of the quality of the material brought for sale, non-availability of organised warehouses at procurement centres. In addition loss due to driage during transit, non-availability of cold storage/proper warehouses, non-availability of well equipped transport facility to preserve perishable goods during transit near to procurement centres are also the difficulties being faced by TRIFED in respect of perishable goods. Lack of infrastructure facilities like regulated markets, poor roads and communication facilities and inadequate storage facilities make the procurement operations very difficult. The remoteness of the producer region from lucrative markets also presents enormous difficulties especially in handling perishable commodities with the requisite speeds.

6.21     The Committee note that in view of its mandate and available resources TRIFED procures commodities from Village/Periodic Rural Market (Haat Bazaars) and regulated markets under APMC Act. Besides, while selecting areas of procurement due consideration is paid to the benefit of tribals and existence of tribal population but the presence of non-tribals among the sellers is unavoidable. The Committee, therefore, recommend that procurement from non-tribals should be discouraged and procurement activities should be largely restricted to tribals and from tribal areas so as to ensure higher earning and larger employment opportunities for the tribals.

6.22     The Committee also note that despite the presence of the official agencies of TRIFED such as TDCCs, FDC, LAMPS, VAN-SURAKSHA samities etc for the purpose of procurement, still, substantial quantities of commodities sold by tribals are procured by private traders who have no commitment to provide fair and economic prices. To make maximum profit at the expense of the poor and ignorant tribals these private traders resort to all sorts of malpractices such as cheating, under-weighment, denial of premium for quality and advancing of loans to be adjusted at the time of harvest against the supply of produce. The reasons for the disadvantage position of the tribal producer is due to remoteness of areas, ignorance of market conditions and practices and lack of any effective organisation among the tribal sellers. The Committee, therefore, recommend in order to wean away the tribal sellers from the clutch of the private traders, TRIFED should forge close ties with the local tribal producers and to provide them loans at low rate of interest which can be adjusted at the time of harvest, to organise the tribal sellers in an effective manner and to educate them on market awareness and exploitative nature of the private parties etc.  The Committee strongly feel that TRIFED should evolve some mechanism to see that the tribals are not exploited by unscrupulous elements and they are paid the remunerative price for the products.

6.23     The Committee have observed that TRIFED does not have any standard and quality control board of its own and cannot insist for strict quality specification as it procures directly from the tribals. Besides, there are no set parameters/standardised norms to determine the quality of MFPs/TBOs, which are brought to the market yard for sale. The Committee feel that though it may be a long term process and requires time and capital investment, some parameters/standardised norms to determine the quality of MFPs/TBOs need to be set up for the sake of utility and quality conscious customers and for marketability and profits.                     

 

C.        Sales Markets

 

6.24     The various commodities produced by Tribals are marketed by:

(i)         Inviting offers from parties through open tender

(ii)        Through brokers

(iii)       Inviting offers based on mailing list

(iv)       Inter branch transfer of stocks

(v)        Inviting offers from buyers through branches

(vi)       Sale to predetermined parties for whom the stocks were procured

(vii)      Sale on consignment basis.

6.25     However, TRIFED in general prefers to sell the stocks in the open market by invitation of offers through open tenders published in leading local newspaper having wide circulation.  As and when necessary offers are also invited through tenders by way of advertisement in other areas also.  TRIFED has also started putting all its tender notices for sale of commodities on the net so that prospective buyers could access the same.  However, in case of violent fluctuations of rates TRIFED also adopts the policy for disposal of stocks through brokers and other methods as mentioned above.  All commodities are offered for sale on ex-godown, as is where is basis.  They are marketed throughout the country by network of TRIFED’s branches.

6.26     Recently TRIFED has established the Tribes Shop in New Delhi – the first unit of a countrywide retail outlet, which will enable the tribal people to access the market for their art and handicrafts, which exists in the metropolitan and other urban markets of the country and in the export market.  The product line of the Tribes shop includes authentic and unique art; craft, textile and other products made by tribals and physically & mentally challenged persons.  The products in the shop have been carefully selected by a panel of experts from the respective fields.

6.27     In the domestic market the main customers of TRIFED are MARKFED for goods to be supplied under PDS, Oil processing industries, consumer goods manufacturers, industrial consumers and also the traders who are engaged in bulk buying.

6.28     The market for the commodities dealt by TRIFED are volatile and are subject to a number of other influencing forces like Government policies, imports/international price of a commodity, demand/consumption of a product by the industry etc. which are beyond its control.  In addition the crop condition of the natural products especially MFPs is unpredictable and thus it is difficult to establish a stable market.

6.29     TRIFED has proposals for taking up the study of the markets on the demand pattern of commodities.  However, with the existing financial constraints TRIFED is not in a position to do the same.

6.30     The Committee note that the collection and marketing of MFPs being a state subject, the prices fixed for various kinds of MFPs will differ from state to state.  And due to unseen market forces, demand and supply, seasonality of production and total yields etc. the prices to be paid for MFPs will fluctuate from place to place and from time to time.  The Committee, therefore, recommend that a fund should be set up to maintain stable prices for major/minor forest produces of the tribal area such as Niger seed, Mahua seed and flowers, Tendu leaves, Gum-karaya,     Lac etc. and also to ensure remunerative prices to tribals to encourage them to make higher collection of these produces.

 

D.        Export

 

6.31     TRIFED has successfully put India on the export map by securing an international market for several items of tribal produce.  The major tribal produce exported by TRIFED in a big way to countries across the globe are – Gum Karaya, Niger Seed, Lac, Spices, De-oiled cake of Sal, Mango Kernel, Soya, Rapseeds, Tendu leaves, Red Chillies, Neem, Tamarind, Neem and Pulses.  It is making a breakthrough in the procurement and marketing of rare medicinal products and herbs.

6.32     Gum Karaya which has a wide range of applications in the food processing industry, pharmaceuticals, cosmetics, textiles, paper, leather and even in the petroleum sector is exported to Japan, U.S.A., European countries and South East Asian Countries.  Nigerseed oil is of good quality with a pleasant, nutty taste and is used as a cooking medium, soap making, paint oil, solvent extraction units, cattle feed, bird feed etc. is exported to U.S.A., Australia, Latin America and European Countries.  Tendu leaves are exported exclusively to Sri Lanka, Castor Seed to Germany.  Soya DOC and Rapeseed DOC is exported to Korea and Singapore.

6.33     The marketing strategy adopted by TRIFED for export of items/commodities produced by tribals as mentioned above are through:

1.                  Direct Export to importers overseas

2.                  Securing orders through International brokers

3.                  Securing orders through Brokers in India

4.                  Export through Associate Shippers.

6.34     TRIFED is the sole canalising agency for exports of Gum Karaya and Niger Seed from India.  Over the last few years, TRIFED has exported over 3000 tons of Gum Karaya to Japan, the U.S., the U.K., Canada, Germany, Thailand, Spain and Italy.  TRIFED has been also appointed as Registration agency for export of Lac.  This helps in the monitoring of Lac export and Indian Lac reaches nearly 100 countries of the world.  Total exports of Lac from India increased to 9944 MT during 1997-98 as compared to 8693 MT during 1995-96.  TRIFED has been active in training tribals in the scientific collection of Lac, storage and distribution of Brood Lac.

6.35     The export business of TRIFED is facilitated and channelised through the Ministry of Tribal Affairs and the Ministry of Commerce. TRIFED has been able to sustain the tempo of its export business with the continued support and cooperation of the Ministry of Commerce.

6.36     TRIFED’s export have been in association with shippers who have in the face of strong competition done an excellent job in maintaining its share of the market.  TRIFED has instituted export awards with a view to recognising outstanding performance and also to encourage other exporters to emulate the outstanding exporters.

6.37     The Committee have been informed that during 1990 a dispute arose with M/s Universal Coop. Inc., Minnesota, USA which was referred by the party for redressal to the US Court.  The judgement against the said claim has gone against TRIFED.   The US Court has further imposed an embargo on TRIFED’s exports to the United States.  With this judgement of the US Court the exports of TRIFED have come to a grinding halt to the USA which is the major consuming area of Niger Seed, a commodity widely grown by the tribals.

6.38     In view of the importance of USA market, which is the largest trading partner of India, an out of court settlement was contemplated.  The party agreed for an out of court settlement if TRIFED pays an amount of USD 2,49,900/- i.e. Rs. 110 lakhs (1 USD = Rs. 44/-).  The proposal in this context is under submission to the Ministry.

6.39     The Committee note that the marketing strategy followed by TRIFED is sales through the network of branch offices by way of inviting tenders and mailing list, sale on consignment basis and sale to predetermined parties etc. at the rate of ex-godown as is where is basis.  Besides, TRIFED has set up the Tribes shop the first unit of a countrywide retail outlet for sales of tribal goods, commodities, art and craft products.  The Committee are of the view that for the purpose of sound marketing, commodities procured by TRIFED may be divided into perishable and non-perishable and nature of storing and maximum length of storage period, availability of infrastructure facilities such as ware houses, godowns, cold storage etc. need to be identified and studied as most of the commodities dealt by TRIFED are not only volatile but subject to many other external forces. The Committee recommend that in order to survive and sustain its commercial activities in this age of cut-throat competition TRIFED should revamp its whole structure of marketing strategy based on scientific and modern day marketing methods.  The Committee further recommend that TRIFED should carry out an extensive study of markets on the demand pattern of commodities on priority basis as this would in turn help in establishing a stable market for commodities produced by the tribals.

6.40     The committee have observed that it has been seen that several items such as Gum Karaya, Niger Seed, Lac, Soya, Rapeseeds, Tendu Leaves, Spices, Pulses, Mango, Kernel and De-oiled Cake produced by the Tribals have found an international market in a big way as a result of the efforts of TRIFED.   The Committee are of the view that there is still scope for expansion of the number of items of export produced by the tribals.  The Committee, therefore, recommend that more items of MFPs, SAP, horticulture spices and medicinal herbs may be brought under the ambit of the list of items for export as such a move will have a resultant impact on the tribal producers in terms of more production, more wages and higher remuneration for their produces.

6.41.        The Committee note that TRIFED is exporting some particular commodity to a particular country, for example Tendu Leaves are exported only to Sri Lanka and Castor Seed to Germany only, which shows that export of some particular commodities are confined only to specific destinations.  The Committee, therefore, recommend that TRIFED with the help of concerned Ministries, Departments, proper agencies, business partners and consultancy firms should explore more overseas markets not only for these commodities but also for other items/commodities for export produced by the tribal so as to broaden the base of export.

6.42          The Committee note with concern the manner/approach in which the Management of the Federation and the Ministry of  Tribal Affairs have tackled the trade dispute with the U.S.A.   The Committee felt that inordinate delay on the part of the Ministry of  Tribal Affairs for a decision concerning it will put the poor tribal producer of Niger Seed as well as the Federation in a more commercial disadvantage/loss because U.S.A. is the single largest consuming country of Niger seed – a commodity widely grown by the tribals.  The Committee, therefore, recommend that the Ministry of  Tribal Affairs should take immediate decision in this regard for the overall interest of the poor tribal producers.