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ABSTRACT

Farmers’ Producer Organizations (FPOs) are the new paradigm in Indian farming. Collectivization of agricultural producers through FPOs is essential for small and marginal farmers for harnessing the economies of scale by providing more bargaining power, access to credit and insurance, better market and price discovery etc. On the basis of data available from various government sources, in this article we have analyzed and discussed the status and potential benefits of Farmer Producer Organizations in West Bengal.

Keywords: FPOs, Small and marginal farmers, West Bengal

The concept of group approach in farming is not objectively new in India, but it has evolved through the years into various forms (Agarwal, 2018). Groups have been set up by farmers or primary producers to achieve specific goals and objectives of their group efforts (Ministry of Agriculture & Farmers Welfare, 2014). Some of the purposes served by these groups in our country are: making seed available locally through ‘community seed banks’, conserving water and using judiciously for equitable distribution among all the farmers through ‘water user associations’, hiring various agricultural machinery and equipment by resource poor farmers through ‘custom hiring centers’, engaging every farmer for group farming, ensuring equitable distribution of common property resources as forest through Joint Forest Management Group of tribal farmers or social fencing groups of hill farmers for sharing fodder grass among themselves. A new model of formal farmer group and collective action in the form of Farmer Producer Organization (FPO) has emerged recently in the Indian agriculture sector. The introduction of FPOs in India was advocated by an expert committee chaired by renowned economist Y. K. Alagh in 2002 (Alagh, 2007; Singh, 2008; DAC, 2013 and Mukherjee et al., 2018). The committee recommended establishment of farmers’ organization in which the unique aspects of cooperative enterprise would be protected, while regulatory framework would be similar to that of companies. FPOs have successfully acted as a platform to empower member farmers by increasing their competitiveness and providing emerging market opportunities (Trebbin and Hessler, 2012; Mukherjee et al., 2019). In this article, an attempt has been made to critically analyse the way the Farmer Producer Organizations have originated and evolved over a period of time in West Bengal.

Evolution of FPOs in West Bengal

During 2011-12, the Government of India has launched a new programme Vegetables Initiative for Urban Cluster (VIUC), as a sub-scheme of Rashtriya Krishi Vikas Yojana (RKVY) to address the issues related to production, marketing, post-harvest management and distribution of vegetables. In West Bengal, seven districts were selected to introduce the VIUC by the State Department of Food Processing Industries and Horticulture, in partnership with the Small Farmers Agribusiness Consortium (SFAC) of Ministry of Agriculture, Cooperation & Farmers Welfare, Government of India. Under the VIUC, small and marginal farmers are collectivized at different levels with the goal of accelerating technology penetration, enhancing productivity, enabling better access to inputs and increasing income of the farmers, thus strengthening sustainable livelihoods based on agriculture. To achieve these goals, farmers are organized into Farmers Interest Groups (FIGs), each with near about 15–20 farmers, and 40-50 such FIGs are federated into a Farmer Producer Organization (FPO). The programme envisaged that FPOs will turn into commercial entities with the goal of conducting economically viable business activities, for this FPOs should establish its own business plan based on local conditions.

First report of formation of Farmer Producer Organization in West Bengal dates back to 2012 at North 24 Paraganas district of West Bengal when Bhangar Vegetable Producer Company Limited was first registered as trust. First it was registered as a trust due to ease of registration. Moreover, it was difficult for the farmers to understand the functioning of company. After couple of years, when the business model has stabilized and the FPO got organizational and management experience, it was registered as a Company. This FPO was formed under two year programme of SFAC, where no financial assistance was provided to FPO. Only Resource Institution were provided financial support. State Department of Horticulture and Food Processing of West Bengal helped them in this journey. Access development services, a national livelihood support organization was given the responsibility to promote the FPO and Vegetable Initiative for Urban Clusters (VIUC), a new programme by the Government of India launched during 2011-12 as a sub-scheme of Rashtriya Krishi Vikas Yojana (RKVY) was undertaken. The FPO faced a lot of challenges in the initial stages such as lack of government support or recognition, difficulties in getting bank loan and securing licenses from Agricultural Produce Marketing Committees (APMCs). Moreover Farmers were very reluctant to join FPO, as the incident of Sharadha Chit Fund Scam is still fresh in their memory and they have the fear that their money will be gone. So they are very cautious about investing their money. A policy framework for farmer producer organizations (FPOs) in India was introduced in 2013 by the Government of India. It outlined the role of central and state government in supporting FPOs, and declared FPOs with cooperatives on-par. The Small Farmer Agri Business Consortium (SFAC), is the nodal agency for coordinating between the states to promote FPOs in India. Later, NABARD started promoting FPOs establishing a dedicated fund named "Producers, Organizational Development Fund (PODF)" to assist such organizations on three levels, i.e. funding facilitation, capacity building and support for market linkage. Additionally, funding assistance is also made available for skill building, business incubation services, ICT implementation, documentation of successful model etc. The PRODUCE Fund (Producers’ Organization Development and Upliftment Corpus Fund) of Rs. 200 crores was established at NABARD by the Government of India in 2014-15 to establish 2000 Farmer Producer Organizations (FPOs) in India. The PRODUCE Fund aims at promoting new FPOs and meeting their initial financial requirements, making them capable of credit, financially competitive and viable business enterprise of farmers. Considering the importance of FPOs, the Government of India declared the year 2014 as “Year of Farmer Producer Organizations”. Since then, FPOs are gaining momentum. SFAC and NABARD appoints Resource Institutes (National or local level non- government or charitable organizations) to promote the FPOs. These Producer Organization Promoting Institutions (POPIs) have primary responsibilities to ensure that the PO achieves a viable operating level, and that the FPO`s staffs and members acquire technical and management skill to effectively manage the group and run the business when POPI withdraws its support. POPI gets support from NABARD and SFAC to meet some of the recurring costs incurred in promoting the FPO based on individual project requirements. In 2018, a MoU was signed between SFAC and NABARD, West Bengal for comprehensive growth, development and financing of FPOs. In February 2020, Prime Minister launched a campaign to set up 10,000 new FPOs across the country in the next five years.

Status and geographic distribution of FPOs in West Bengal

As of July 2020, there were 150 FPOs supported by NABARD and 89 supported by SFAC in West Bengal (SFAC, January, 2022 and NABARD Portal on Farmer Producers’ Organisations, 2022). From Table 1, it can be seen that, FPOs which are promoted by SFAC, concentrated at few districts like South 24 Pargana (10), Uttar Dinajpur (9), Paschim Medinipur (8), Birbhum (8). In comparison, the FPOs promoted by NABARD are spread across most districts. Yet in districts like Coochbehar (35), Alipurduar (22), Purba Medinipur (19), Birbhum (10) and Murshidabad (10) there are greater numbers of FPOs. FPOs are prominent in fewer districts could be due to a) supporting environment (availability of local Resource Institute), b) areas where water and land related projects (i.e. watershed, water users groups, wadi, self help groups, common interest groups, joint forest management groups) are done in the past or continuing, c) farmers face similar problems in production or marketing or commonality in the crops grown in the area d) availability or market e) have a strong track record of collective action and f) types of crop grown or enterprise undertaken etc.

District-wise FPO density /500 cultivator population was calculated as the FPOs composed of about 500 members are typically considered to be viably benefiting from economies of scale (Government of India, 2020). From the results of Table 1 (Please download the full article for all tables and figures), it is suggested to promote the top performing districts like Coochbehar, Alipurduar, Birbhum etc.so that they can grow as a model for the less successful FPOs. Also, mid-range districts (like Purba Medinipur, Howrah, Uttar Dinajpur) have a great scope, so efforts should be given to them. Urban FPOs are possible particularly in the places where market opportunities are there. From Table 2, it can be seen that only 3.33% of farmers are mobilized under NABARD and SFAC promoted FPOs in West Bengal. So, there is scope to increase the coverage and bring more producers under the umbrella of the FPO. It is worth noting that NABARD promotes the larger number of FPOs yet larger number of farmers mobilized by SFAC.

Producer Organization Promoting Institutes (non-government and voluntary organization, civil society organization, charitable institute, rural development and self-employment training institute and KVK) play a key role in the formation and operation of FPOs. During initial time, they assist the FPOs in documentation procedures, mobilize the producers and provide technical and financial assistance. Also all the members are required to participate actively in organizational activities, share the works and responsibilities to get maximum benefit from the group efforts of FPO. For ensuring this, quality leadership and managerial resources appear to be critical. Moreover, building organizational ecosystem and social processes operating in the group should be given due importance for successful performance and ensuring stability of the Farmer Producer Organizations (Gorai et al., 2022).

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Evolution and Growth of Farmer Producer Organizations in West Bengal A Critical Analysis_compressed.pdf