NEW DELHI: The Modi government has slashed the minimum support price of seven of the 11 products covered under minor forest produce collected by tribals in remote forest areas.The decision comes three years after the previous Congress-led UPA government fixed the MSP for these products for the first time.“The decision had to be taken because MSPs had been fixed on the higher side and needed to be rationalised. From now, the prices would only increase,” Tribal Affairs Minister Jual Oram told ET.The MSP has been reduced to less than half for two products — rangini lac (reduced from Rs 230 per kg to Rs 100) and kusumi lac (reduced from Rs 320 per kg to Rs 150 per kg). The MSP remains the same for two products (gum karaya and sal seed) while it has been increased 13.6% in the case of honey, from Rs 132 per kg to Rs 150 per kg.The scheme, which had been conceived as the next Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) and a welfare programme to cover 100 million tribals, was rolled out at the end of 2013-14 in tribal-dominated Schedule V area states. Its core objective was to obliterate the intermediaries and reach tribals directly.Officials said the decision to reduce the MSP has been taken in view of demands from state governments, which had been incurring severe losses under the scheme.Under the scheme, the state agencies put up weighing scales at the village haats and acquires produce at the MSP. In case these agencies run into losses selling minor forest produce, the tribal affairs ministry has to make good the losses, which are shared in a 75:25 ratio, with the Centre bearing 75% of the losses.According to data provided by the ministry, the states acquired minor forest produce worth Rs 62 crore but managed to sell it for just Rs 27 crore, taking a hit of more than 50%. “Some MSPs were unrealistically high. The scenario for lac, specifically, changed. Earlier it had a very high export demand, but not right now.This is why the MSPs had to be reduced, otherwise the system would have been unviable,” said an official.Ex-tribal affairs minister V Kishore Chandra Deo , who had introduced the scheme, said: “MSP should only increase. We had worked out a formula where MSP is automatically increased. Reducing MSP is hurting the weakest and most vulnerable.”