The Kendu Leaf Trade: Problems & Prospects in Orissa - Vasundhara

the Corporation. For instance, there was no follow up action by the management to analyze the
causes of the lower a.s.p.(average sale price) and take remedial actions. Similarly, regarding 205
quintals of leaves found short and stolen under different central godowns of the company during
1996-2002, no recovery action was initiated (May 2003). Further, no action was taken for
realization of Rs.34.24 lakh from the original bidders who did not turn up for payment of their
dues in time(Govt of Orissa 2003).
The case of Kerala Dinesh Bidi(KDB) is an interesting example of OFDC’s dealing mechanisms.
KDB, one of the biggest bidi manufacturers of India having its unit in Kerala used to be one of
the important buyers of KL from Orissa as it procured more or less 25,000 quintals of processed
leaves from OFDC every year, and was known also for its high rate of payments. During 2000-
01, OFDC dispatched, ‘in good faith’, 25,200 quintals of KL to KDB without executing an
agreement, and raised bills worth Rs.12.36 crore against that. KDB paid only Rs.6.33 crore, and
then said that the rest was to be adjusted against what they had already paid ‘in excess’. KDB’s
argument was that upto 2000 OFDC received more than the deserving price because of the
‘erroneous fixation of price’ in the negotiation committee. The CAG remarked that such a plea
was not legally acceptable as the price was fixed by the said committee alongwith the
representatives of KDB(vide Govt of Orissa 2003, p.34). However, OFDC could not recover the
due amount mainly due to non-execution of agreement. Of course, supply to KDB has been
stopped since then despite some offers from their side for negotiation (because the offers did not
appear to provide a permanent solution to the problem), but supplying so much of KL without
any agreement indicates that OFDC did not behave like a responsible public limited company.
While unofficial sources do say that failure in this recovery does not matter much as KDB has
actually paid in excess, what does matter is that Orissa lost one of its big customers.
Mangalore Ganesh Bidi (MGB) was another important purchaser for Orissa. This company
procured more or less the same quantity like KDB, but was known for its practice of buying
some of the last sold lots. However, after 2001 the relationship between OFDC and MGB
virtually broke up allegedly due to some unfair activities of OFDC, and hence another big
customer was lost 11 .
Regarding the loss of these two customers, the attitude at OFDC has been that of a dame-care
monopolist who thinks that there is no problem in the marketing of his produce as there is no
dearth of buyers in the market. However, such an attitude is not expected from a responsible
public limited company. Even private traders would normally see this against their policy.
Although the KL sale policy of the government in 1997 recommended to open at OFDC a
marketing cell for KL so that it could shift from mere selling to actual marketing, it was
implemented only in 2005. Even in 2006(June), OFDC does not appear to have actually shifted
to ‘marketing’ in the real sense of the term, and lacks market intelligence also. Its plea(in 1996-
97) that ring formation by traders resulted in poor sale has elsewhere been rejected (vide Govt of
Orissa 2000, section 8.2.8).
11 It was a coincidence that the Mangalore Ganesh Bidi(MGB) was facing difficulty during this time owing to some
internal as well as external reasons. Its popular brand had a good market in the United States, but in 1999 the US
banned the import of this bidi on the ground that MGB had been found using bonded child labour for manufacturing
the bidis.
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