In a weekly haat in Koraput district, a Kondh tribal woman named Kamala Majhi spread out her sal seeds, dried mahua flowers, and hill broom grass on a plastic sheet last monsoon. A middleman offered her ₹8 per kilogram for sal seeds — the same seeds that, once processed into sal butter, fetch ₹300 per kilogram in cosmetics supply chains across Europe. Kamala didn’t know that. She took the ₹8. Multiply her story by roughly 84 lakh tribal people across Odisha, and you begin to understand how a state sitting on an estimated ₹15,000 crore worth of minor forest produce manages to let most of that wealth slip through its fingers every single year.
Why Odisha’s Tribal Forest Economy Demands National Attention
Odisha is home to 62 distinct tribal communities, including 13 classified as Particularly Vulnerable Tribal Groups (PVTGs). Forests cover nearly a third of the state’s geography. The Forest Rights Act of 2006 gave community forest resource rights to tribal gram sabhas, theoretically unlocking their legal claim over minor forest produce (MFP) — everything from kendu leaves and sal seeds to tamarind, lac, and medicinal herbs. Yet in 2026, the cooperative infrastructure meant to channel this wealth back to collectors remains skeletal, underfunded, and politically orphaned.
The Origins of Tribal Cooperatives in Odisha
Odisha’s experiment with tribal cooperatives dates to the early 1960s, when the state government established the Tribal Development Cooperative Corporation of Odisha Limited (TDCCOL) in 1964. The original mandate was simple: procure MFP directly from tribal collectors at fair prices and eliminate the chain of middlemen who had historically captured 60-70% of the value. TDCCOL was also supposed to supply essential commodities to remote tribal hamlets where private retail had no incentive to reach.
For decades, the corporation focused overwhelmingly on kendu leaf procurement — a politically sensitive commodity because it feeds the bidi industry and generates significant seasonal employment. By the 1980s, Large Area Multipurpose Cooperative Societies (LAMPS) were set up across tribal sub-plan areas. At their peak, approximately 1,100 LAMPS operated in Odisha’s scheduled areas, acting as the last-mile cooperative presence in villages where no bank branch or government office existed.
But here’s where the story turns. Most LAMPS gradually became defunct or dormant. A 2019 review found that fewer than 40% were operationally active, and many existed only on paper — with outdated membership rolls, no working capital, and buildings reclaimed by termites.
How the System Works — and Where It Breaks Down
On paper, the MFP value chain through cooperatives should look like this: tribal collectors harvest produce from community forests, deposit it at the nearest LAMPS or primary cooperative, which aggregates and sells to TDCCOL or federations, who then process and market the product. The collector gets a Minimum Support Price (MSP) announced by TRIFED under the central government’s MFP-MSP scheme, launched in 2014.
In practice, I’ve tracked several failure points that keep this system from delivering. First, the MSP coverage is limited. As of 2026, only 73 MFP items are covered under the central MSP list, while Odisha’s forests yield over 150 commercially viable products. Second, procurement centres are often too far from collection points — tribal hamlets in Mayurbhanj, Kandhamal, Malkangiri, and Rayagada can be 15-25 kilometres from the nearest active procurement point. Third, working capital is chronically short. TDCCOL and LAMPS simply don’t have the cash flow to buy produce at scale during the peak season, which is exactly when middlemen show up with ready money.
| MFP Item | MSP per Kg (₹) | Estimated Market Value per Kg (₹) | Key Districts |
|---|---|---|---|
| Sal Seed | 22 | 150-300 (processed) | Koraput, Mayurbhanj |
| Mahua Flower | 29 | 80-120 | Sundargarh, Keonjhar |
| Tamarind (de-seeded) | 54 | 100-160 | Koraput, Rayagada |
| Lac | 200 | 400-600 | Mayurbhanj, Keonjhar |
| Kendu Leaf | State-administered | High (bidi industry) | Statewide tribal belts |
| Wild Honey | 245 | 500-700 | Simlipal, Kandhamal |
The gap between MSP and processed market value tells the whole story. The value addition that could happen within tribal cooperatives — cleaning, grading, processing, packaging — almost never does. Approximately 85% of Odisha’s MFP leaves the state in raw form, with processing profits captured elsewhere.
The ₹15,000 Crore Question: Why Does Wealth Stay Locked?
Multiple estimates — from NABARD assessments, TRIFED reports, and state forest department data — place the total annual extractable value of Odisha’s forest produce between ₹12,000 and ₹15,000 crore if processed and marketed through organised channels. Currently, tribal collectors realise barely ₹2,000-3,000 crore of this value. The rest either goes unharvested, is sold at predatory rates to intermediaries, or is processed outside the state.
Political interference remains a stubborn challenge. Kendu leaf operations have historically been a patronage tool — seasonal jobs in leaf collection and bundling are distributed through networks that owe more to electoral calculations than cooperative principles. The Van Dhan Vikas Yojana (VDVY), launched by TRIFED to create tribal enterprise clusters called Van Dhan Vikas Kendras (VDVKs), has had mixed results in Odisha. While approximately 1,200 VDVKs were sanctioned for the state, ground reports suggest fewer than half are genuinely operational with regular procurement and processing activity.
Climate disruption adds another layer. Erratic rainfall patterns have affected mahua flowering cycles and sal seed yields in southern Odisha over the past three years. Tribal collectors who depend on seasonal forest produce for 30-40% of their annual income are the first to feel these shocks.
What Chhattisgarh’s Model Teaches Odisha
Neighbouring Chhattisgarh offers a sharp contrast. Its state minor forest produce federation has built a more aggressive procurement network, and its C-Mart retail chain — selling processed tribal produce — has turned into a viable brand. Chhattisgarh processes significantly more MFP within state borders, and its Van Dhan clusters have shown better survival rates, partly because the state tops up central MSP rates for several commodities. Odisha has been slower to adopt this kind of state-level value-addition strategy, though I’ve seen encouraging pilot work in Mayurbhanj’s honey cooperatives and turmeric processing units in Kandhamal.
What the Next Five Years Could Look Like
The Ministry of Cooperation, established in 2021, has signalled interest in reviving PACS and LAMPS as multi-service centres, potentially integrating them with Common Service Centres for digital access. If Odisha’s dormant LAMPS are revived with working capital lines from NABARD and NCDC, they could serve as the procurement backbone that’s currently missing. TRIFED’s push to create tribal e-marketplaces — connecting VDVKs directly to institutional and export buyers — could bypass some middleman layers if internet connectivity reaches the last mile.
The real game-changer, though, would be decentralised processing units owned by tribal cooperatives themselves. Sal butter extraction, tamarind processing, honey filtration and packaging — these are not technologically complex. They need modest capital investment (₹20-50 lakh per unit), reliable power supply, and training. If even 20% of the estimated ₹15,000 crore value is unlocked over five years, it would transform livelihoods for millions of forest-dependent families.
Back to That Weekly Haat in Koraput
Kamala Majhi doesn’t track policy debates in Delhi or Bhubaneswar. She tracks the price of sal seeds and whether the rains came on time. What she needs is staggeringly basic — a functioning cooperative within walking distance that pays her a fair price in cash on the same day. That cooperative needs working capital, a processing shed, and a buyer who isn’t a middleman offering one-twentieth of the final product value. Odisha’s tribal cooperative movement isn’t failing because the resources don’t exist. It’s failing because the institutional plumbing between forest and market remains broken. Fixing it isn’t charity — it’s sound economics. And it’s long overdue.
If you work in the cooperative sector, study tribal economies, or simply believe that ₹15,000 crore in natural wealth shouldn’t bypass the people who harvest it — follow this space. Share this story. Push for accountability from TDCCOL and your local LAMPS. The forest wealth is there. The people are there. The cooperatives just need to actually work.