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ABSTRACT

Farmer Producer Organization (FPO) is registered under the Companies Act 1956. The Department of Agriculture, Cooperation and Farmers Welfare, Government of India declared as "Farmer Producer Organization" in the year 2014 to promote agriculture. The main objective of forming the Farmer Producer Organization is to benefit the farmers collectively and to provide better opportunities for income to the farmers through direct business operations. Farmer Producer Organization (FPO), through a market-oriented approach; about 7374 Farmer Producer Companies (FPCs) are working across the country to strengthen the socio-economic status of small and marginal farmers. The Union Finance Minister, Government of India has set a target of creating 10000 FPOs in the next five years by 2023 - 2024. FPOs help to sell agricultural products and provide better prices to about 4.3 million farmers even in the adverse situations of COVID-19. The FPOs are the future of Indian agriculture and catalyst of self-reliant India

Keywords: Atmanibhar Bharat, FPO, FPC, Agriculture

Cite this article as: Panday, H., Sah, A.K.,  Rai, R.K. and  Kharbikar H.L. (2021). Prospects of Farmer Producer Organisations (FPOs) for Self-reliant India. Food and Scientific Reports. 2(12): 24-27.

Source: - Farmer Producers` Organisations supported by (NABARD, 2019).

The FPOs are groups of rural producer’s coming together based on the principle of membership, FPO members can leverage collective strength and bargaining power to access financial and non - financial inputs, services, and appropriate technologies, reduce transaction costs, tap high-value markets and enter into partnerships with private entities on more equitable terms (Mukherjee et al., 2020). With the strength of collective planning for production, procurement, and marketing to add value to members` produce (Krishi Sutra 2th SFAC, 2014).

Farmer Producer Organisations have the potential to give farmers better bargaining power and create a more transparent Agri – market. They need to be nurtured to their full potential, mobilizing farmers into groups of between 15 – 20 members at the village level called Farmer Interest Groups (FIGs) and building up their associations to an appropriate federating point i.e. Farmer Producer Organization (FPOs). The department of agriculture and cooperation (DAC), Ministry of Agriculture, Government of India launched a Pilot Programme for promoting member-based Farmer Producer Organisations (FPOs) during 2011-12, in partnership with state governments, which was implemented through the Small Farmers` Agribusiness Consortium (SFAC). The pilot involved the mobilization of approximately 2.50 lakh farmers into 250 FPOs across the country (Policy & Process Guidelines for Farmer Producer Organisations, 2013).

 Importance of Farmers Producer Organisations

Farmer Producer Organisations (FPOs), a concept established for enhancing the socio-economic status of the Indian farmers through the market-oriented approach, about 7374 Farmer Producer Companies (FPCs) in India which covers about 4.3 million farmers, challenges faced by FPOs in Covid-19. However, the inherent strengths and capabilities of these organizations have been considered as one of the effective tools to combat the adverse impact of COVID - 19 on the agricultural community. FPOs, as a part of the new normal ecosystem play not only building socio-economic resilience to farmer`s but also achieving several sustainable development goals. It strongly emphasizes the creation of farm gate level agriculture infrastructure through the FPOs and formalization of micro food enterprises, which is not created an only suitable ecosystem for the development of agricultural marketing system. It also lead to better price realization of agricultural produce benefitting small and marginal farmers through the value addition (FICCI, 2020).

In agricultural marketing, there is a long chain of intermediaries who very often work non – transparently leading to the situation where the producer receives only a small part of the value that the ultimate consumer pays. Food Corporation of India (FCI) and state governments would be encouraged to include FPOs as agencies for procurement operations under the Minimum Support Price (MSP).

Support to the FPOs would be extended to develop forward linkages through storage, post-harvest processing, value addition, and packaging for enhanced access to fair and remunerative markets (Mukherjee et al., 2019). FPOs would be encouraged to provide for risk management through access to insurance services including crop and weather-based insurance apart from life insurance and general insurance for farm equipment support in terms of identification of appropriate crops to the agro-climatic context too would be provided through the FPOs. The State governments encouraged to use FPOs to implement programs i.e. National Food Security Mission through linkage with Agricultural Technology Management Agency and Rashtriya Krishi Vikas Yojana. FPOs supported the transmission of farm technology, input supply, and credit to leverage better prices. FPOs enhance backward and forward linkages with financial institutions & linkages between farmers, processors, traders, retailers, and customers (Bikkina et al., 2018)

 Types of Farmer Producer Organisations

Farmer producer organizations can be classified into two groups these are following:-

a. Community-Based and Resource Orientated Farmer producer Organisations

This type of FPOs established in village-level cooperatives or associations dealing with inputs needed by FPOs members, the resource owners and to enhance the productivity of their businesses based on land. These organizations are generally small, have well-defined geographical areas, and are predominantly concerned about inputs. However, the client group is highly diversified in terms of crops and commodities. There are many primary-level agricultural cooperatives in the developing world, but the majority of them have been financially vulnerable and ineffective, Strategies have been developed to strengthen existing farmer organizations.

 b. Commodity based and market-oriented farmer producer organization

 Commodity-based and market-oriented farmer producer organizations specialize in a single commodity for value-added products which have expanded markets. They are designated as output-dominated organizations not specific to any single community; they can obtain members from among the regional growers of that commodity who are interested in investing some share capital to acquire the most recent processing technology and professional manpower. These FPOs are generally not small and have to operate in a competitive environment i.e. input supply, collection of produce, processing, and marketing are all integrated to maximize the returns on the investments of the FPOs members (Chamala and Shingi, 1998).

c. Who Provides Support to Farmer Producer Organisations

Many organizations supported that financially & technically for promotion of the Farmer Producer Organisations.

c. Services provided by Farmers Producer Organisations

1. Financial Services

 The FPOs provide loans for crops production as well as purchase machinery i.e. pump sets, construction of wells, laying of pipelines, etc. The FPO will provide various insurance like crop insurance, Electric Motors Insurance, and Life Insurance.

2.  Input supply services

The FPOs will provide low-cost and quality inputs to the FPOs member farmers. It will supply seeds, fertilizers, pesticides, sprayers, and pump set accessories. The procurement and packaging services of the FPO will procure agricultural produce from its member farmers will do the storage, value addition, and packaging.

3.   Marketing Services

The FPOs direct marketing after procurement of agricultural produce. This will enable members to save in terms of time, transportation costs, distress sales, and price fluctuations, etc.

 4. Technical Services

FPOs promote the best practices for maintaining marketing information systems, diversified farming, raising levels of knowledge improving skills in agricultural production and post-harvest processing, etc.

 5. Networking services

The making channel for all information about product specification, market price, and other business services accessible to rural producers facilitating institutions building linkage of producers, processors, traders, and consumers, were facilitating linkages with government programs.

Conclusion

                Farmer producer organizations contribute significantly towards high agricultural incomes & welfare among small and marginal farmers across the country. FPOs is an efficient and holistic extension system should be capable of meeting the need of small and marginal farmers in the fast changing scenario is the need to enhance the income security and sustainability growth of the farmers.

 Reference

Krishi Sutra 2 Success stories of Farmer Producer Organisations (2013). Ministry of Agriculture & Food Processing Industries Government of India DO. No. 3639 pp. 01 – 100.

Mukherjee, A., Singh, P., Maity, A., Shubha, K., & Burman, R. R. (2020). Enhancing livelihood security of dairy farmers through farmers’ producer company: a diagnostic study of Bundelkhand region. Range Management and Agroforestry, 41(1), 156-167.

Mukherjee, A., Singh, P., Shubha, K., & Burman, R. R. (2019). Facilitating and Hindering Factors Affecting Growth and Functioning of Farmers Producer Companies in India. Indian Journal of Extension Education, 55(4), 14-20.

Mukherjee, A., Singh, P., Burman, R. R., Shubha, K., & Roy, M. L. (2018). Development of test to measure knowledge level of farmers producer organization members about improved hill agricultural practices. IJEE, 57-74

Nalini Bikkina, Rama Mohana R Turaga, Vaibhav Bhamoriya (2018). Farmer Producer Organizations as Farmer Collectives: A Case Study from India pp. 01 – 38.

Operational Guidelines (2020). Formation and Promotion of 10000 Farmers Producer Organisations  (FPOs) Government of India Department of Agriculture, Co-operation & Farmers Welfare Ministry of Agriculture & Farmers` Welfare pp. 01 – 68.

Policy & Process Guidelines for Farmers Producer Organisations (2013). Ministry of Agriculture Dept. of Agriculture and Cooperation Govt. of India pp. 01 – 92.

Prishila Kujur, AK Gauraha and Om Kumar Netam (2019). The socio-economic impact of farmer producer organizations in Chhattisgarh plains, Journal of Entomology and Zoology Studies 7(6): 1104 - 1106

Shankariah Chamala and P. M. Shingi (1998). Establishing and strengthening farmer organizations improving agricultural extension: a reference manual was prepared under a contract between FAO and the International Program for Agricultural Knowledge System (INTERPAKS), College of Agricultural, Consumer, and Environmental Sciences, the University of Illinois at Urbana - Champaign, United States. M - 67 ISBN 92 - 5 - 104007 – 9.

Sharpening the Saw (2020) Preparing FPOs as an effective tool towards Aatmnirbhar Bharat, Empowering FPOs. Federation of Indian Chambers of Commerce and Industry (FICCI) pp. 01 – 07.

 

Tirtha Chatterjee, Raghav Raghunathan and Ashok Gulati (2019). Linking farmers to the futures market in India Working Paper 383. Indian Council for Research on International Economic Relations.  Pp: 01 – 41.

 

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