Govt to tweak MSP norms for periodic price hikes

New Delhi - The Indian government plans to alter the minimum support price (MSP) framework for minor forest produce (MFP) to ensure regular price increases that will benefit tribal communities. The tribal affairs ministry has commissioned a study by The Energy and Resources Institute (TERI) to review the existing MFP list under the MSP scheme and determine if revisions are necessary.

TERI will conduct field surveys to evaluate potential changes that can bolster prices for tribes reliant on forest produce for their livelihoods. The government aims to introduce the MSP revision from the upcoming financial year, breaking a six-year price freeze. The MSP scheme, initiated by the previous UPA government in 2013-14, guarantees a minimum price for specific forest produce collected by tribal individuals, especially those residing in remote locations.

These goods are sold at village markets (haats), with state agencies intervening when market prices dip beneath the stipulated MSP. A senior official explained that MSP revision is required because certain MFPs fetch significantly higher prices than those already set. The study will also assess appropriate responses to market surpluses and establish suitable price-fixing mechanisms for common items like gum or lac.

Despite guidelines mandating MSP revisions every three years, rates have remained stagnant since 2020. The proposed increase stems from MPs' concerns raised during two social justice and empowerment committee meetings, highlighting the risk of tribal communities falling prey to middlemen and accepting substandard prices for their forest produce.

The last revision occurred in May 2020, amidst the Covid-19 pandemic when village haats were temporarily closed to prevent social distancing violations. In response, the central government raised MSP by 16-30% for various products and expanded the number of forest produce items under the scheme from 49 to 87. The upcoming revision is anticipated to positively impact tribals in several states, particularly Himachal Pradesh and Gujarat, which are set to hold assembly elections soon.