Background of Farmers Producer Organization:
Fragmented and individual nature of small producers, besides marginalization of their voices at local and national levels, restricts their ability to access services, resources, and markets. As a result, large numbers of individual farmer producers in the country, tend to be both economically and socially vulnerable, with high levels of poverty and poor access to basic services such as health, water, housing, and sanitation.
Against the above backdrop, the Companies Act was amended in 2002 to enable the formation of Producer Companies (PC). A producer company or a Farmer’s Producer Organization (FPO) is a legal entity of the producers of any kind viz agricultural produce, forest produce, artisanal products or any other local produce, where the members are primary producers. A PC should have a minimum of 10 members or two producer entities or a combination thereof. Since the above enactment, the PC has been hailed as the organizational form that will empower and improve the bargaining power, net incomes, and quality of life of small and marginal farmers/producers in India.
Well-functioning farmer producer organizations are crucial for vulnerable small producers to address the complex challenges they face today, including improving productivity, overcoming asymmetries in information and knowledge, access to finance, input and output markets, accessing and managing natural resources sustainably, and adapting to climate change.
Around 3500+ producer companies have been registered so far in India, of which, around 2000 producer companies were promoted by NABARD assisted by NGOs acting as Producer Organization Promoting Institution (POPI). The primary goal of Producer Companies is to link small holders to markets. The model was created at the time of increasing corporate investment in the food retail and food processing sector in India, which has a direct impact on Indian farmers. Initial support of National Bank for Agriculture and Rural Development (NABARD) and Small Farmer’s Agriculture- Business Consortium (SFAC), and at a later stage, that provided by venture capital companies and retail organizations platform has been there to initiate and develop farmer producer organizations/companies.
The Farmers Producer Organizations (FPOs) were promoted either by social development organizations (NGOs) or by the professionals who provided support to the farmer members in the processes leading up to registration of FPOs, complying with various legal and statutory requirements, etc.
While working in this sector for nearly 7 years, Yuva Mitra found ample gaps at all the levels of implementation.
The Gaps found in FPO Sector were:
The growth of FPO sector has been uneven and concentrated.
- The average membership of FPOs is around 50 to 400 which are inadequate to make the operations of the FPO economically viable. An FPO should have around 800 to 1000 members to lend financial strength and give scope to run its business profitably.
- The low membership also restricts the capital base limiting its ability to access funds from banks and other funding agencies including NABARD.
- The low membership is also an indicator of lack of awareness among the rural community about the benefits of an FPO and the failure of the promoters and directors of FPO to sensitize and convince the farmer producers to join the FPO and ensure better returns for their agriculture produce.
- The majority of the FPOs are engaged only in the supply of agri. inputs. The inability to expand their operations to take up post harvest operations such as collection, storage, grading, processing, packaging and marketing of produce makes it difficult for the FPOs to attain viability and control of the value chain.
- Poor professional management due and inability to afford to hire of professionals.
- Lack of vision and direction of Promoters and Board of Directors.
- Low equity base due to low share value resulting in dependence on funds from outside.
- Lack of support from external actors like government, donors or private sector.
- Lack of technical, business & managerial skills for members to operate and develop FPOs.
- Negative experience of modern retailers with producer companies and vice versa
- Delivery of quality product, quantities and on time has been a challenge for PCs
- Modern retailers have not shown enough trust and patience while dealing with PCs as they fail to understand social dynamics. They have looked into these PCs just as any other trader/wholesaler, and thus lack the long-term vision and
- Patience to build a sustainable business relationship.
YUVA MITRA – EXPERIENCE OF WORKING WITH FPOs
Yuva Mitra has been working for more than 7 years in the field of promoting and developing Farmer’s Producer Companies by providing training and technical support to their FPO members and staff. Yuva Mitra has set up a training centre at Sinnar, Nashik for imparting training to different stakeholders on FPOs. The activities taken up by Yuva Mitra for promotion and development of FPOs are as under:
- Awareness creation among farmers in different parts of India including the villages covered under watershed development projects implemented under NABARD supported NHWDP/WDF/IGWDP;
- Conduct of training programmes for farmers, NGOs, bankers and other stakeholders for sensitizing them on the benefits of FPOs and the process of their formation;
- Conducting advanced training to designated members of Board of Directors of FPOs on legal and statutory requirements, business planning, etc
- Conducting training programmes for senior officers of NABARD on FPOs;
- Conducting 3 month Certificate Course for CEOs of FPOs in partnership with BIRD, Lucknow;
- Organizing exposure visits to working FPOs for different stakeholders;
- Promoting formation of FPOs ; and
- Providing hand holding services to NABARD supported FPOs in Maharashtra as Resource Support Agency (RSA).
Yuva Mitra conducted a total of 83 training programmes on FPOs for different target groups during the last three years covering 2606 participants. The programmes were sponsored by NABARD, ATMA, Govt. of Maharashtra, MAVIM, MACP, Bombay Chamber of Commerce, Tata Trusts, Jharkhand Rural Livelihood Programme, Lupin Foundation, Ambuja Cement Foundation, Reliance Foundation, Deshpande Foundation, BAIF Mittra, NM Sadguru Foundation, Development Support Center- Gujarat, Nageshwara Charitable Trust, Welingkar Institute of Management and many other NGO’s from all over India. We also organized onsite training programs in 14 states for NABARD, JSLPS- Ranchi and other Organizations.
The summary of in-house training programmes conducted during the last 03 years:
Table No: 1
Training Programme Sponsored by
No. of participants
Capacity building and exposure on FPOs – 26 programs.
NABARD, Farmers, and NGO staff
Capacity building and exposure on FPOs – 17 programs;
Capacity building of BODs of FPOs – 5 programs
Capacity building of POPI (NGO staff)- 3
Farmers’ meet -2
Deshpande Foundation, NABARD, BAIF Mittra, Lupin Foundation, Farmers,
NGO staff, Board of Directors of FPOs
Certificate course for CEOs on FPOs- 2 (with BIRD);
Capacity building of BODs and CEOs of FPOs – 17 programs
Capacity building of Board of Directors – 5
Capacity building and exposure on FPOs – 6
Ambuja Cement Foundation, Reliance Foundation, Farmers, JSLPS- Ranchi
BOD of FPOs
The Policy Makers, Bureaucrats, Dignitaries from NABARD, Government of Maharashtra and Other States, Representatives from National and International Agencies and Universities frequently visit Yuva Mitra to understand the FPO movement.
Certificate Course for CEOs of FPOs-
Yuva Mitra conducted two programmes of 3 Months duration each for CEOs of FPOs in partnership with BIRD, Lucknow. A total of 51 CEOs of registered FPOs from different parts of the country attended the programme.
Hence, to overcome these gaps Yuva Mitra has initiated the National Facilitation Centre for Producers Company.
About the National Facilitation Centre-
National Facilitation Centre will provide a catalytic platform to FPOs, nurture their objectives, develop ecosystem for attaining operational efficiencies and enabling these community based organizations to become self-reliant.
Yuva Mitra has been facilitating formation of FPOs. The first FPO to be sanctioned and disbursed loan by NABARD under its Producer Organizations Development Fund (PODF) viz. Devnadi Valley Farmers Producers Co. Ltd was promoted by Yuva Mitra. Enhancing natural resource management, ensuring food security, creating marketable surplus and ensuring better incomes leading to livelihood and social improvement, are the desirable impact of a development program. The Government of India has articulated its ambition of doubling income of farmers by 2020. The use of technology and improved practices may lead to increase in agriculture production significantly, but the ultimate objective of increased farm incomes may not be realized through mere production led approach alone. The absence of appropriate, viable and competitive marketing facilities often restricts small and marginal farmers from deriving maximum benefits for their produce.
The small marketable surplus, produce not meeting preferred market quality, poor negotiation capacity of the unorganized farming communities further complicates the situation. With the opening up of the Indian markets more than a decade back, India’s agro-food sector has undergone rapid transformations towards greater market share of modern food retails. This has impacted Indian agriculture and farmers as supermarkets re-organized supply chains towards more explicit forms of coordination, such as the unorganized farmers very often find themselves in unfavorable bargaining positions with supermarket chains, mainly due to their inability to meet the requirements of size, quality and timeliness in supply.
Yuva Mitra has directly facilitated formation and registration of 15 FPOs.
MAJOR WINGS SERVING DISTINCT PURPOSE OF FPO
Our Major Working Themes:
- Facilitation Centre strives to create platform and enable PCs/FPOs to develop a viable & inclusive growth model wherein Govt/funding agencies/retailers/Venture capitalist etc.
- Facilitation Centre takes active role in the overall development of the agro-business chain and the industry.
- It provides a handholding support through following technical assistance:
· Socio economic development.
· Organizational development.
· Technical assistance (especially for pre and post-harvests stages)
· Legal, Financial & Market plans.
· Human Resource development – capacity building & training of promoters, farmers and employees of FPO’s.
- The Facilitation Centre is a one stop solution, to meet the service needs of farmer producer organizations.
- It provides function as a successful business entity in its own right and will have its own identity with a clear business plan, a clear understanding of the market, and its cost-income base.
- It prepares Audio/Visuals materials like posters, flip charts, wall hangings etc for sensitization and awareness creation at village level.
- Facilitation Centre networks with national level and international level institutions to promote and develop FPO’s.
- It mentors the programs of FPO’s that enables them to undertake their Mission and create & sustain right energy within the organization.
- It organizes seminars, workshops, stakeholder meets to create opportunities of networking with funding agencies, development institutions, Government organizations, retail entities etc.
- Any other activity relating to Development of FPO’s.
Infrastructure facilities available with Yuva Mitra, the promoting institution of Facilitation Center, will be used by the center for conduct of all its in-house activities for which a token fee will be paid to them.
- Office Complex
- Training complex
- Conference room
- Class rooms
- Hostel facilities
- Single accommodation – 4 rooms with attached bath
- Double accommodation – 18 rooms with attached bath
- Dormitories 2
- Mess / Pantry / Dining Hall