New Government Initiatives for Enhancing Tribal Livelihood Through Forest Produce

Tribal households across central India have collected mahua flowers, tendu leaves, sal seeds and wild honey for generations. Yet for decades, this abundance rarely translated into real income. Middlemen fixed prices, produce spoiled before it reached a market, and gatherers had no processing facilities to add value to what they collected. Over the last few years, the government has rolled out a set of connected schemes to fix exactly this gap, and they lean heavily on one institution that tribal women already trust: the self-help group.

Why the old forest produce economy failed tribal gatherers 🔗

Minor forest produce, or MFP, includes everything from bamboo and honey to medicinal herbs and seeds that tribal communities gather but do not grow themselves. Because most of this produce is perishable and gatherers lack storage or transport, they have traditionally sold it immediately at whatever price a trader offered. The Ministry of Tribal Affairs has acknowledged that nearly 5.5 crore forest-dwelling tribals depend on this trade, which meant exploitative pricing affected an enormous number of households at once.

The government’s response was not a single scheme but a layered strategy: organise women into groups that can process and hold produce, guarantee a floor price so gatherers are never shortchanged, and build physical infrastructure so raw produce can become a finished, sellable product close to where it is collected.

Women self-help groups and value addition to forest produce 🔗

The first layer of this strategy runs through women self-help groups, or SHGs, small voluntary groups of women who pool savings and take on income-generating work together. State governments have actively promoted SHGs that specialise in MFP processing, and two activities show up again and again: stitching sal leaves into disposable plates and bowls, and preparing pickles, jams or masalas from forest fruits and seeds.

From gathered leaves to a finished product 🔗

Sal leaf plate making is a good example of how this value chain works in practice. Women first collect fallen sal leaves from forest floors, a task documented in a NABARD study from West Bengal as a year-round activity for landless, forest-dependent women. SHGs then buy these leaves in bulk at a fair rate, stitch several leaves together with bamboo splints, and mould them into plates or bowls using a shared electric press. What used to be a discarded forest by-product becomes a marketable eco-friendly product, and the income stays with the women who did the work rather than a middleman.

Pickle-making follows a similar logic. Forest fruits such as amla, tamarind or wild mango, along with mahua flowers, are seasonal and spoil quickly if sold raw. Once an SHG has basic processing equipment, these same fruits can be turned into pickles or preserves that keep for months and sell at a much higher price than the raw fruit ever could.

The bank linkage that makes this scale 🔗

None of this works without capital, and this is where the SHG-Bank Linkage Programme comes in. Started by NABARD as a pilot connecting around 500 SHGs to banks in 1992-93, it has since grown into what NABARD describes as the largest microfinance programme in the world by client base, with more than 84 percent of linked groups made up entirely of women. Groups that follow basic discipline, regular meetings, consistent savings, internal lending and timely repayment, build a credit history that banks recognise, which lets them borrow working capital for raw material, equipment or expansion without depending on informal moneylenders.

Researchers studying the programme note that its impact goes well beyond credit access. A study in the Community Development Journal found that SHG-bank linkage has become a platform for broader social change among rural women, touching education, health and even political participation, alongside straightforward income generation. For tribal SHGs specifically, this bank linkage is what lets a small group of leaf-plate makers turn a seasonal side activity into a stable household income source.

Minimum support price: a safety net beneath every transaction 🔗

Processing produce helps, but it means little if the raw material itself is bought at an unfairly low price. This is the problem the Minimum Support Price for Minor Forest Produce scheme was designed to solve.

How the MSP mechanism protects gatherers 🔗

Launched by the Ministry of Tribal Affairs in 2013-14, the scheme guarantees that if the open market price for a listed MFP item falls below a declared floor price, state government agencies will step in and buy it at that floor price instead. According to TRIFED, the scheme now covers 87 MFP items, up from just 10 items in 9 states at launch, and the Ministry has released working capital of over 300 crore rupees along with infrastructure funding to state agencies that implement the procurement on the ground.

The scale of the revision matters here. When the Ministry last overhauled the price list, it raised support prices by 30 to 40 percent across commercially significant items, directly increasing what individual gatherers took home for the same basket of produce.

A widening basket of protected produce 🔗

The list of covered items has kept expanding as the government identifies more MFPs with real market potential. Beyond the initial expansion, the Ministry added further items to the MSP list in later phases and explicitly moved to converge this pricing mechanism with the Van Dhan Yojana, so that the same produce benefits from both a guaranteed floor price and a processing unit nearby. This convergence is deliberate: a guaranteed price alone still leaves gatherers selling raw material, while a processing unit alone is not very useful if the raw material it depends on is bought unfairly.

Van Dhan Vikas Karyakram: building a scientific value chain 🔗

The centrepiece of the government’s current push is the Van Dhan Vikas Karyakram, literally the “forest wealth development programme.” Its core idea is to combine the traditional knowledge tribal communities already hold about forest produce with modern technology, packaging and marketing support, converting informal gathering into a recognised entrepreneurial activity.

What happens inside a Van Dhan Vikas Kendra 🔗

The delivery unit for this programme is the Van Dhan Vikas Kendra, a common facility centre set up in tribal-majority districts. TRIFED’s own description of the programme lays out the structure clearly: each Kendra brings together 10 Van Dhan SHGs, with up to 30 MFP gatherers or artisans in each, so roughly 300 beneficiaries share one facility. Inside, gatherers get equipment and basic training to clean, grade, package and sometimes brand their produce before it reaches buyers, rather than selling it in an unprocessed state. The programme’s own stated ambition is to reach around 25 lakh tribal gatherers nationally through this model.

The push to scale to 6,000 kendras 🔗

Rolling out thousands of these centres needed a phased plan, and TRIFED’s implementation guidelines set an early target of establishing around 6,000 Van Dhan Kendras. The guidelines specify that the first phase deliberately prioritised the 39 aspirational tribal districts identified for rapid development, before expanding to other districts and states based on tribal population share and how much MFP with processing potential was locally available. This sequencing meant the districts with the greatest need were the first to get facilities, rather than spreading resources thin across the country at once.

Building SHG clusters for sustainable livelihoods 🔗

A single SHG, however well run, has limited bargaining power and cannot always afford advanced processing equipment on its own. The strategy behind Van Dhan therefore goes one step further: individual Van Dhan Vikas SHGs are grouped into clusters, and these clusters are managed jointly rather than as isolated units.

Crucially, this isn’t about building a parallel structure from scratch. Existing tribal SHGs that are already active, some formed years earlier through NABARD’s bank linkage programme or state livelihood missions, are converged into these Van Dhan clusters rather than being sidelined. This means a group that has been stitching leaf plates for years under an SHG-BLP loan can become part of a larger cluster with access to a shared Van Dhan facility, better market linkages and TRIFED’s branding support, without losing the credit history and internal discipline it had already built. The result is meant to be a livelihood system with several reinforcing layers: guaranteed prices through MSP, processing infrastructure through Van Dhan Kendras, and financial backing through SHG-bank linkage, all converging on the same tribal household.

What do you think? If a Van Dhan Kendra and a guaranteed minimum price both existed in a tribal district, do you think gatherers would still choose to sell raw produce to a trader instead, and why might that happen even when a better option is available? How much of tribal livelihood security depends on the strength of the SHG a woman belongs to, rather than the schemes on paper?

References

1. https://pib.gov.in/newsite/PrintRelease.aspx?relid=189017
2. https://www.nabard.org/auth/writereaddata/tender/pub_1010241128371162.pdf
3. https://www.nabard.org/contentsearch.aspx?AID=225&Key=shg+bank+linkage+programme
4. https://academic.oup.com/cdj/article/58/2/283/6374653
5. https://trifed.tribal.gov.in/en/program/non-timber
6. https://www.pib.gov.in/Pressreleaseshare.aspx?PRID=1693540
7. https://trifed.tribal.gov.in/en/pmvdy/snd-n-sias
8. https://trifed.tribal.gov.in/en/pmvdy/guideline