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

ut in practice certain things are fixed(like the procurement price) which is why the nationalized
trading has not been compatible with the changing dynamics 15 .
While some like Chanchlani opine for denationalization of the trade, there are traders who
believe that this would lead to a chaotic situation because there are so many people at various
levels ready to have their bite in this business cake, once they get this freedom the current
organized structure of the business would collapse.
In fact, one may recall the situation soon after the merger of the major kendu leaf producing
princely state areas with the parent province in 1948-49.These ex-states used to grant monopoly
rights in KL procurement, but after merger the Government of Orissa allowed the people of these
areas to exercise their full tenancy rights and the monopolists of the ex-state period now had no
right to claim any stake in the kendu leaf growing on private lands. As the earlier system was
about to collapse, petty traders lacking adequate experience and financial capacity entered into
the business resulting in an unnecessary competition leading to the collection of immature leaves
and thereby damaging the quality. Smuggling was also rampant. To check this, the GoO had to
declare KL as an essential commodity through the promulgation of the Kendu Leaves(Control
and Distribution) Order, 1949 (Govt of Orissa 1959, quoted in Rath 2004, p.12).
The major weak point in nationalized trading is that the produce is considered to be a thing to be
traded as per the order of the government, i.e., a sincere and dedicated personal touch is often
found lacking. There have been some officials who had been sincere in the matter to one or more
extents, but their contribution has not been properly acknowledged in many cases leading to a
discouragement. Even there are grievances more serious than that. The approach that it is not
‘our trade’ but ‘government’s trade’ might have favoured a lackadaisical attitude of the
authorities in such matters, but the current situation demands that all such internal issues be
quickly resolved.
Another matter of attention is the need of a single agency that will deal with both
procurement/processing and trading. The current system of giving the responsibility of
procurement to the KL wing and that of sale to OFDC sometimes seems to be allowing them an
opportunity to blame each other in order to escape any allegation of mismanagement or
irresponsible behavior at their level. Of course, the current system does involve the DFOs or
their subordinates of the KL Divisions in the sale/auction process, so it is not that the authorities
of one organization are completely ignorant of the problems/limitations of the other; but since
the current situation demands a uniformity in the approach from procurement to sales, and also
OFDC is getting more & more discouraged in the trading because of some of its un-addressed
grievances, the possibility of giving complete responsibility to the KL wing may be seriously
considered if existing issues can not be addressed properly under the current system. Reshuffling
15 In fact, many bidi manufacturers of Madhya Pradesh(undivided) reportedly shifted their units to other states when
kendu leaves were nationalized in this state in 1989 causing a substantial hike in the price of the leaves from just
Rs.5 to Rs.30, per kg. The direction of the state government to the manufacturers to pay a Dearness Allowance @2
paise per point further worsened the situation as the manufacturers found their cost of production now increased to
Rs.82.45, much higher than that in the competitor states. It was also alleged by them that the quality of the
production had deteriorated after nationalization, and that the production had also not been sufficient. The
manufacturers boycotted auctions(of KL) to protest the lower leaf content in the standard bags
(www.india-today.com/itoday/06101997/business.html).
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