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

The Orissa Kendu Leaves Purchasers Association has categorically alleged that though it was
earlier decided to hold tripartite meeting between the purchasers, the KL wing, and OFDC; this
has not implemented, and even OFDC has ignored responding to their letters in the relevant
matters (vide their letter dtd.25-7-05 to Sri S.N.Burma, then Joint Secy., Forest Department). To
this the reply (unofficial) available at OFDC was that the said Association is not the association
of the actual end users, but of some agents who just act as mediators between the end users and
OFDC; and also that neither these people can help in enhancing our sales, nor is there any such
legal provision for this kind of meeting; so why go for it However, this explanation can not just
be taken for granted as the President of the Federation of Bidi, Biri Leaves, and Tobacco
Merchants, Kolkata, who also happens to be a bidi manufacturer does see the need of this kind of
meeting. Even the KL task force recommended to encourage such meetings (vide section 10.2 of
its report). Moreover, acknowledging the receipt of letters and giving appropriate reply is a
simple matter of curtsey, so this should not have been ignored.
Of course, OFDC has been struggling with several problems and it has its own limitations.
Earlier, timber used to be its chief source of income; but after the ban in 1992 this source has
been squeezed to such an extent that income of KL has become important. It is for this reason
that OFDC has retained a significant part of the royalty to be paid to the government. Such a
regular default finally resulted in a rather insulting situation when the government decided to
allow utilization of funds through a joint account so that OFDC can no more utilize the
concerned funds independently.
One of the major grievances of OFDC has been the low rate of commission paid to it for KL
selling. The KLCC has rejected the request of the Corporation to raise this rate from 4% to 8%.
While there is a argument that OFDC’s contribution in selling KL does not deserve more than
4% commission, there is a perception on the other side(OFDC) that even betel shops are getting
higher rates of gain on the products they sell, and that why should one invest on market
intelligence, etc. with such a low rate of return
What seems important is that if the rate of commission is actually a factor that has affected the
performances of OFDC, then the government should not ignore it. Either OFDC is to be stopped
from expecting more than the existing rate, or its share should be increased. Given the fact that
timber cutting has been resumed recently, OFDC’s dependency on KL commission may not be
so critical now; but if we are expecting it to operate perfectly as a commercial organization, then
we should also give respect to its genuine commercial expectations. The government should also
take initiatives to pay incentives to the Corporation in case the latter makes some outstanding
achievement in the sales.
9.1.2.1: Facilitating direct export from Orissa:
It is only Orissa which supplies leaves for export to other countries, as export-quality leaves are
essentially processed ones. In many of the phal-leaf producing states it is the bidi manufacturers
themselves who procure leaves from the government, and hence they do not intend to process
and/or grade their procurement for direct export purpose.
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