The scheme was originally prepared and circulated in 1992 by the then Ministry of Welfare to State Governments through their letter No.20012/10/92-TDB dated 25.11.1992.

Background of the Scheme:

           The majority of tribals live in and around forests.  Apart from timber, the major forest produce, forests abound with non-timber forest produce like tamarind, lac, gum karaya, amla, mahua flowers/seeds, honey, sal/siali leaves, tendu patta, soap-nut, shikakai, myrobalan, hill grass, nuxvomica, etc., called the Minor Forest Produce (MFP).

            Tribals depend heavily on the MFP for their livelihood.  Initially tribals used to collect MFP for their own consumption.  In case of some excess stock, they used to sell these in the near by weekly shanties for barter or for cash.

            MFP has a major demand even outside the tribal areas.  Tribals, as they lacked awareness about the market value of these produce and also usually did not have direct contact with markets outside the tribal areas, had to suffer the handicap of not been able to profit from marketing their MFP outside their areas.  They also lacked holding capacity and money power to indulge in it as a business proposition.

            The inadequacies of tribals to sell their MFP led to traders and other middlemen entering the scene.  Over a period it deteriorated into unscrupulous people exploiting the situation, denying tribals a fair deal, thus adversely affecting the interests of tribals.

            To overcome this situation, most of the States nationalised their major MFP items.  States also established Tribal Development Cooperative Corporations (STDCCs), State Forest Development Corporations, Minor Forest Produce (Trading and Development) Federations (MFPTDFs) etc. (hereinafter collectively called ‘STDCCs’) for procuring and trading in MFPs.  These were established for procuring MFP from tribals and protecting them against exploitation by private traders.

             Due to resource constraints, however, the STDCCs were also not in a position to exploit the existing potential of MFP items.  It was felt that in order to enable tribals to receive better remunerative prices, the STDCCs had to strengthen their resource bases so that they could handle even those MFP handled by private traders.

              The Central Sector Scheme of ‘Grants-in-Aid to State Tribal Development Cooperative Corporations (STDCCs) etc. for Minor Forest Produce (MFP)  Operations’ was thus launched in Nov. 1992 to help these STDCCs to ensure that tribals got remunerative prices for their MFP.  It was estimated that this operation could generate gainful employment for about 10 million persons per year.

This is a Central Sector Scheme through which grants-in-aid are made available through State Governments to:

-         State Tribal Development Cooperative Corporations (STDCCs)

-         Forest Development Corporations (SFDCs), and

-         Minor Forest Produce (Trading & Development) Federations

for taking up the minor forest produce operations.  The funds under this scheme are available to the STDCCs/SFDCs for:-

(1)   Increasing the quantum of MFP handled by setting off operational losses, if need be;  

(2)   Strengthening the share capital base of the Corporation for undertaking MFP operations thereby increasing the quantum of MFP presently handled;  

(3)   Setting up of scientific warehousing facilities, wherever necessary;  

(4)   Establishing processing industries for value addition with the objective of ensuring maximum returns on the MFPs for the tribals;  

(5)   Giving consumption loans to tribals; and  

(6)   Supplementing Research & Development (R&D) efforts.  

            As all schemes which are proposed to be continued from one Five-year plan period to the next Five-year plan Period can be done so only after a thorough review of the scheme, this scheme is also presently under review.