26.12.25

Sona Buru Jungle Producer Company Initiates Royalty Payments to Gram Sabhas in Jharkhand

On 20 December 2025, the women-owned Sona Buru Jungle Producer Company (SBJPC) made its first royalty payments to 23 Gram Sabhas through their Community Forest Resource Management Committees (CFRMCs) in Simdega district, Jharkhand. The payments were made from the revenue earned through the sale of seasonal forest products (SFPs), marking a significant step in operationalising Community Forest Resource Rights (CFRR) under the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006, commonly known as the Forest Rights Act (FRA).

The payment ceremony was held at the residence of Shri Naman Bixal Kongari, Member of the Legislative Assembly (MLA) from the Kolebira Assembly Constituency. Members of SBJPC’s Board of Directors, media representatives, and block- and district-level officials were present. This event marked the first time in Jharkhand that a producer company (PC) has made royalty payments to Gram Sabhas for the commercial use of community forest resources.

Royalty under the FRA

Under the FRA, Gram Sabhas filing CFRR titles have the authority to protect, manage, and regulate the use of their forests. This includes the right to set conditions for the harvesting and commercial use of SFPs, including the collection of royalty.

Before beginning aggregation, SBJPC obtained formal authorisation from the CFRMCs of the concerned villages. As part of this authorisation, the Gram Sabhas set a royalty rate of 2 per cent of the sale value of all SFPs sourced from their CFRR areas.

First Commercial Sale and Royalty Distribution

In 2025, SBJPC aggregated 44.47 tonnes of sal (Shorea robusta) seeds from CFRR areas in multiple villages in Simdega district and sold them to AAK India Private Limited for ₹14.4 lakh. Based on the agreed 2 per cent royalty rate, a total royalty of ₹4,635 became payable to the 23 CFRMCs from which the products were sourced.

Although the amount is modest, it establishes a functioning system through which Gram Sabhas can receive a share of the value generated from the commercial use of their forests. As volumes and prices increase in future seasons, this mechanism can generate more meaningful and regular revenue for village institutions.

Royalty payments were transferred directly to the bank accounts of 12 CFRMCs. For the remaining committees, cheques were handed over symbolically because their bank accounts at the State Bank of India, Bano Branch, are still being activated. These payments will be transferred once the accounts become operational.

Institutional Separation between Governance and Enterprise

This first royalty payment demonstrates how forest governance and commercial activities can be kept institutionally separate within a rights-based forest economy. Gram Sabhas, through their CFRMCs, retain authority over CFRR areas, including decisions on harvesting, conditions of access, and royalty rates. The PC is responsible for aggregation, sales, and market engagement.

This separation allows community institutions to protect their rights and ecological interests while enabling professionally managed enterprises to handle market-facing operations.

Way Forward

As SBJPC expands into additional SFPs, this first royalty payment provides a working model for linking CFRR-based forest governance with enterprise-based livelihoods in Jharkhand. It shows how the FRA can be implemented in a transparent, accountable, and scalable manner to generate economies of scale.