How Farmer Produce Companies are empowering the agricultural market in India?

Organic agriculture

April, 2021

How Farmer Produce Companies are empowering the agricultural market in India?

by Bhakti Harchekar

While agriculture is the main occupation of majority in India, and employs more than 50% of its population, contributing to approximately 18% of its GDP, it is still plagued with many problems & challenges. Small and fragmented land holdings of marginal farmers, expensive nature and inadequate  access to agri inputs like manures, fertilisers, seeds etc., lack of mechanisation, irrigation and other facilities along with natural problems like droughts, excess and unseasonal rain and climate change affect Indian agriculture.  Additionally the small and marginal farmer faces problem in getting the right price for his produce. Lack of proper marketing & storage facilities mean that he has to sell off his goods at whatever price he is offered resulting in middlemen and others benefitting at his expense.  

Farmer Producer Companies attempts to change this scenario for farmers. Farmer Producer Companies (FPC) are set of small farmers or producers of agricultural products that form a group and register themselves under the Indian companies act to harness the power of combined efforts. FPC brings together producers, especially small and marginal farmers, into producer organisations. This has emerged as one of the most effective ways to address the many challenges of agriculture, but most importantly provides improved access to investments, technology, inputs and markets.

Agro mall set up by the FPO in Dhawalpuri, Parner taluka ,Ahmednagar Maharashtra, 

The story of WOTR’s Khadeshwar FPC in Banegaon, Bhokardan Taluka, Jalna

Watershed Organisation Trust (WOTR) has been actively working in Jalna for over two decades, mainly doing Watershed Development work in the rainfed regions. Our focus has been sustainable agriculture that helps farmers in reducing costs and increasing their income.  WOTR helps villagers to form FPC with the same focus in mind. The basic purpose of the FPC is to collectivise small farmers or producers for inputs like seeds, fertilisers, credit, insurance, knowledge and extension services & forward linkages such as collective marketing, processing, and market led agriculture production etc. Thus, they are an important instrument for securing collective bargaining power for small farmers. 

The Khadeshwar FPC in Banegaon, taluka Bhokardan, Jalna was established on September 1st, 2017. This company was formed under Pro Soil Project funded by GIZ and monitored by NABARD. It currently has 1243 members including 11 Directors in 8 villages.

Khadeshwar Farmer Producer Company is committed to provide various facilities to the FPC members. The main purpose of the FPC is to provide all the farming needs of the farmers in one place, in good quality and at a low price compared to market rate. It also helps in procuring agriculture inputs required by the farmers at a good rate and ensures they get a good price for their produce while benefiting from Govt. schemes like MSP.

Farmers receive fair price for their produce

One of the objective of the FPC is to increase the farmer’s income by adding multiple income sources in the form of agri allied business activities. Currently the FPC has an agri input shop, through which they supply seeds, fertilizers and pesticides to farmers. They are also in the business of buying and selling maize. In addition to this, the FPC is setting up a cleaning, grading unit for Maize, Gram, and Wheat etc. This project is supported by Nabkisan & PoCRA, a state Govt. scheme.

 Janardhan Uttamrao Dhavale – farmer beneficiary from Khadeshwar FPC

Last year, the Khadeshwar FPC got NAFED’s MSP procurement centre for Gram and has done procurement of Bengal Gram of 1330 quintals on MSP for approx. ₹65 Lakhs. Around 125 farmers have benefited from it and have earned approx. ₹600/- to ₹1000/- more per quintal than the market rate. 

Janardhan Uttamrao Dhavale is one such farmer from Jalna who has benefitted from the Khadeshwar Farmer Producer Company. In 2020, private vendors and middlemen were quoting a price of around ₹3,800/- to ₹4,000/- per quintal for procurement of chickpeas.

Through the Khadeshwar FPC’s MSP procurement centre, central government directly purchased chickpeas at ₹4875/- per quintal reducing the transit costs of the farmers. The farmers got a fair and higher price for their produce thus eliminating the middlemen altogether. Janardhan earned a profit of ₹14,000/- on his sale.

 

An All-Women Producer Group (WPG) in Kadasi and Tada village of Odisha

An all women Farmer Producer Group in Odisha

In 2021, with a view to empower women farmers and provide an alternate livelihood source to them,  two all-women producer groups of 30 women each were formed in Kadasi & Tada village of Odisha. The Lurduma Producer Group in Kadasi village sold 2550 kg of hill brooms at a profit of around ₹5,000/-  and the Mahima Producer Group from Tada village sold 2450 kg of tamarind at a profit of around ₹ 6,000/-. Such initiatives help women farmers reach out to a larger market and help them sell off their surplus produce at a fair price. In the future these groups may collaborate to for a Farmer Producer Company which will benefit the women further.

Ludurma Producer Group in Odisha producing Hill brooms

WOTR has collaborated with Mission Shakti, a program under Women & Child Development (WCD) Department of Government of Odisha which aims at women empowerment and ORMAS – Odisha Rural Development and Marketing society to support these Women Producer Groups.

Most small farmers like Janardhan and the women farmers from the all-women WPG benefit from this collective influence the Farmer Producer Company offers. It helps in eliminating the middlemen and agents who exploit the farmers while using their combined bargaining power to get better rates for agricultural inputs, easy access to financial options and technical know-how and fair prices in the market. At WOTR, we believe that the overall agricultural problems in India could be alleviated and the farmers can improve their living and benefit from the practices of the Farmer Producer Companies.

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