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MSP And MFP – Economics – Free PDF Download


  • For Prelims: What is MSP? MFP? Scheme related?
  • For Mains: Significance of the scheme and MFP for tribals.


  • ‘Mechanism for marketing of minor forest produce (MFP) through minimum support price (MSP) and development of value chain for MFP’ scheme
  • Offer respite to forest-dependent labourers in the wake of novel coronavirus (COVID-19) outbreak, according to experts.


  • The Union Cabinet, in 2013, approved a Centrally Sponsored Scheme for marketing of non-nationalized / non monopolized Minor Forest Produce (MFP) and development of a value chain for MFP through Minimum Support Price (MSP).
  • This was a measure towards social safety for MFP gatherers, who are primarily members of the Scheduled Tribes (STs) most of them in Left Wing Extremism (LWE) areas.
  • The scheme had Rs. 967.28 crore as Central Government share and Rs. 249.50 crore as the States share for the current Plan period.


  • Tribal population gets a remunerative price for the produce they collect from the forest and provide alternative employment avenues to them.
  • Establish a system to ensure fair monetary returns for forest dweller’s efforts in collection, primary processing, storage, packaging, transportation etc, while ensuring sustainability of the resource base.
  • Get them a share of revenue from the sales proceeds with costs deducted.


  • Earlier, the scheme was extended only to Scheduled Areas in eight states and fixed MSPs for 12 MFPs.
  • Later expanded to all states and UTs.
  • Total number of MFPs covered under the list include 49.


  • Purchase of MFP on MSP – State designated agencies.
  • To ascertain market price, services of market correspondents would be availed by the designated agencies particularly for major markets trading in MFP.
  • The scheme supports primary value addition as well as provides for supply chain infrastructure like cold storage, warehouses etc.
  • The Ministry of Tribal Affairs – nodal Ministry for implementation and monitoring of the scheme.
  • The Minimum Support Price – determined by the Ministry with technical help of TRIFED.


  • The Minor Forest Produce (MFP), also known as Non Timber Forest Produce (NTFP), is a major source of livelihood and provides essential food, nutrition, medicinal needs and cash income to a large number of STs who live in and around forests.
  • An estimated 100 million forest dwellers depend on the Minor Forest Produce for food, shelter, medicines, cash income, etc.
  • MFP production is highly dispersed spatially because of the poor accessibility of these areas and competitive market not having evolved.
  • Consequently, MFP gatherers who are mostly poor are unable to bargain for fair prices. This package of intervention can help in organizing unstructured MFP markets.
  • Recognition of tribal rights over non-timber forest products (NTFPs) would accelerate empowerment of the poor and marginalised. Comment.



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