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To protect the interests of about 10 crore crisis-hit small and marginal farmers, the Government should promote Farmer Producer Organisation (FPOs) in mission mode, on a scale like the Self-Help Group movement, a National Advisory Council (NAC) working group has said in its draft recommendations to the Government.
India has an estimated 9-10 crore small and marginal farmers who depend on agriculture for income and employment. With continued land fragmentation, about 15-20 lakh new small and marginal farms are being added every year, the paper said.
The working group, which met here last week and has invited comments on its draft, said it was important to create small and marginal farmer collectives to ensure better earmarking of resources, thereby strengthening grassroots democracy.
In India, 83 per cent of farmers are small and marginal (2005-06), covering nearly 50 per cent of operational holdings. Over 90 per cent of such farmers are dependent on rain for their crops. Hit by the vagaries of the weather, shrinking land assets and profit margins, difficulties in accessing critical inputs such as credit, water, power and quality seeds, fertilisers, etc., this segment has been facing a deep crisis, leading to continued farmer suicides in many regions.
“The present arrangements for risk mitigation, especially crop insurance instruments, are highly unsatisfactory and do not adequately cover the risks faced by small and marginal farmers,” it noted.
The working group, therefore, suggested that first and foremost there was need to aggregate smallholders into members-based FPOs to provide essential goods and services to the rural poor and contribute significantly to the process of rural poverty alleviation.
It also urged the Government to open more procurement centres in remote areas and deepen the minimum support price system to help mitigate the risks involved.
Among other measures, the NAC group also proposed the creation of a professionally-managed apex organisation, with functional autonomy, to act as a single-window source for technical support, training needs, research and knowledge management to State Governments, FPOs etc.
As far as financing goes, quick estimates by the working group suggest that if in the 12th Plan, one crore small and marginal families are targeted to be brought under the FPO umbrella, the Budgetary requirement would be about Rs 3,600 crore for the entire five-year Plan period or about Rs 720 crore a year.
The annual budget of the Rural Development and Agriculture Ministries in the 12th Plan is likely to be about Rs 1,30,000 crore, which means that only 0.55 per cent of the budget of the two Ministries would be adequate to promote FPOs,” it said.
The National Advisory Council had set up a working group in July 2012 to look into “Enhancing Farm Income for Small Holders through Market Integration”.
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