Non-Timber Forest Products Exchange Programme India

24
May

Why Beedi leaf prices hit the roof in Rajasthan and MP : Insights and Analysis

Tendu leaves are one of the most important NTFP species in central India. The leaves of tendu are used for wrapping beedis, the Indian cigarettes and an estimated 350000 tons of leaves, worth US $2000 million, is collected annually throughout the forests of India. The state of Madhya Pradesh is a major tendu patta producing state (25% of the country’s total production) followed by Chhattisgarh (20%), Orissa (15-20%) and Maharashtra (10 %). Tendu leaves collection and beedi rolling is estimated to provide 106 million and 675 million person days of work, respectively, which is worth Rs. 4515 million.

1. Tendu Data - India & RajasthanThis year the process of tendu leaf auction – the economics around it and the royalty – in Madhya Pradesh (MP) and Rajasthan skyrocketed in an unprecedented manner and one was left wondering why. To unravel the puzzle Samarthak Samiti, a peoples’ organization based in Udaipur, offers some insights.

Samarthak Samiti, through its member Adivasi Tendu Patta Cooperative Societies, has been participating in the tendu leaf auction since 1991 in Udaipur, the highest producer of tendu leaf in Rajasthan. The Samiti mainly participates in three units viz. Unit Malviya, Range Devla, Unit Sulav, Range Kukawas and Unit Birothi, Range Jhadol, all within Udaipur North Division. This year, according to Kamalendra Singh Rathore of Samarthak Samiti, a trader from Godhra, Gujarat, named Vandeli Beedi Leaves offered very high bids. It prevented Samarthak Samiti from acquiring even a single unit of tendu leaves. Rathore added that the trader bid Rs. 18.00 lakhs, Rs 45.65 lakhs and Rs 99.00 lakhs, respectively, for the three units that Samarthak Samiti competed for. (Samarthak Samiti had bid of Rs.  7.75 lakhs, Rs 13.50 lakhs and Rs 17.21 lakhs for the units). The bids speak for themselves in terms of the jump in prices!

It is also interesting to note that despite such high bids the wages of the leaf collectors in Rajasthan only increased by Rs 5/- (from Rs. 80 to Rs. 85) as compared to 2016! It means that the increased bidding amounts and the other related costs in the tendu leaves procurement process have not benefitted the people on the ground albeit government coffers are flush with revenue.

Rathore informed us that tendu leaves were sold at Rs 110-115/kg last year, with a costing price at Rs 50-60/kg; however, in 2017, the leaves were sold at Rs 200/kg with a costing price between Rs 90 and Rs 120/kg. The costing price includes royalty, transportation, tax, storage, labour payments, drying of leaves and bag filling.

There are many reasons for the new economics of tendu leaves in MP and Rajasthan. It came to light that the production of leaves decreased by 20% as compared to last year; there have been heavy rains during the collection time, making drying difficult and resulting in inferior quality of leaves; it seems that the Maoist challenge in Chhattisgarh, Andhra Pradesh and Odisha negatively affected tendu leaf collection in these states, the focus now shifting to Rajasthan and MP.

tendupatta 2011 KaliborA lesser-known factor that has influenced tendu leaf auction and procurement is the direct involvement of the beedi manufacturers. They are involved directly in the biding and procurement and have eliminated the middlemen, thereby increasing their profit margin. The increased profits are ploughed back into procurement and results in larger royalties for the state. Combined with the negligible increment in wages for the actual tendu leaf collector the entire process in Rajasthan and MP has taken this new economic avatar.

Two other factors which influenced this year’s tendu leaf auction that Rathore mentioned are also relevant. One, that the MGNREGA diverted a bulk of the potential labour from tendu leaf collection, (a phenomenon visible between 2006-13 itself), which has added to the price of leaf plucking and beedi-rolling. And two, the introduction of the uniform Goods and Services Tax across the “tendu leaf states” increased bid-amounts and royalties.

It is unfortunate that heavy prices for tendu leaves in the auction do not translate into better wages or livelihood conditions for the collectors. The analysis brings to light the array of state and non-state actors who influence the economics of tendu leaf in the grand scale; also there are other variables in the form of Maoism and the employment guarantee scheme. It would be wise to rethink how these factors can be controlled or eliminated in areas where the Forest Rights Act are recognized and the ownership and management of forest resources rests with the communities The dismal impact of increased auction bids and royalty amounts on the livelihoods of people is a wakeup call for all Gram Sabhas to utilize the FRA and PESA legislations and wrest control of the tendu leaves procurement processes.

 

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