Marketing of NTFPs by forest-dependent communities in Maharashtra, India: Alternative models for state support

Studies show that forest dependent communities (FDCs) can improve economic outcomes through community-based forest enterprises (CFEs) based on timber harvest and sale. In India, since FDCs do not have rights to timber even under decentralization laws, they must rely on unpredictable non-timber forest product (NTFP) markets for economic benefits. Additionally, their enterprises would have to compete with pre-existing well-funded state-assisted NTFP marketing institutions. Few studies have focused on CFE performance under such challenging conditions. Recently, FDCs in Maharashtra (India) have formed ‘Village Federations (VFs)’ specially for marketing an important NTFP: tendu (Diospyros melanoxylon) leaves. In this study, we ask whether small-scale, self-financed VFs improve economic outcomes for FDCs as compared to state-assisted NTFP marketing institutions, and what key operational choices lead to those outcomes. We conduct a multi-dimensional assessment of economic outcomes including price and quantity of leaves sold, proportion-timing-accessibility of payments, administrative costs, creation of buffer funds; and compare two VFs and two state-assisted marketing institutions. We find that VFs consistently secured higher prices, enabled faster payments, lowered administrative costs, and created community buffer funds in contrast to the state-assisted models. VFs achieved this through more efficient leaf production, and better management of leaf collection centers, among other measures, to improve operations. The underlying reason for VFs being able to improve operations is that their sole purpose is marketing NTFPs and, unlike the state-assisted counterparts, they are unhindered by other objectives. Further studies can help identify financial and institutional pathways to strengthen VFs and their impact on forest-dependent communities.