Study on Mahua Sub Sector - Cgsird.gov.in

3.3 The Policy and Institutional Context
After the enactment of Provisions of Panchayats(Extension to Scheduled Areas) Act
policies relating to non timber forest produces were liberalized across the country. State
forest department now exercise less or no control over the trade in Mahua. Mahua is a
non nationalized non timber forest produce in Chhattisgarh. Mahua is also outside the
ambit of excise law. But most states still retain excise regulation relating to Mahua. One
can not imagine a Sanjay Market of Jagdalpur lined with retailers of Mahua in
neighbouring Orissa. Since there is largescale movement of Mahua from and to
Chhattisgarh, the policies of other states impact the performance of the sub sector in the
state.
The transit rules and procedures also differ from state to state. This adds to the
transaction costs. Taxation regimes also vary from state to state. Mahua flower attracts
broadly four taxes, VAT, excise duty, mandi tax and forest development cess/tax under
four different legal provisions.
Traders of Chhattisgarh seem to be happy with the policies of Govt. of Chhattisgarh.
Rather they were complaining about the policies of Orissa, Bihar, Jharkhand Govts. But
the distortion caused by differing policies and taxation regimes has significant bearing on
the sub sector.
But the hands off approach has created a situation where the primary producers have to
bank on solely on the traders, big or small. There is no mechanism to address a glut or an
overheating in the market. The absence of promotional institutions neither at the
grassroots nor at the apex is a key element of this sub sector.
Production varies from year to year and the pendulum swing is as high as 100 pc. There
is no system or agency for calculating the impact of “Mahua drought” and mitigation
measures for that. These imbalances in cash flows are a major livelihood concern.
The major producing areas are also the remotest parts of the state where the access to
formal credit system is very minimal. Traders double up as money lenders and seemingly
taking an undue advantage of the situation.
The sub sector in the state is also characterised by near absence of producer
organizations. The hangover of the Van Dhan Samitis still persists. Initiatives like Mahua
Banks promoted by LEAF, an NGO is yet to scale up and become a business model.
Primary Cooperatives under CG MFP federation are yet to play a role in procurement and
trade of Mahua flower.
3.4 The Environmental Context
The process of collection of Mahua flower often is considered environmentally
hazardous. Collection from forest areas often involve burning of forest floor which is
cited as one of the important reasons of forest fire. Burning limits the bio diversity of the