Farmer Producer Organizations (FPOs) is the new buzzword among development professionals and NGOs — both public and private! Everyone wants to mobilise the community and establish FPOs.

FPOs present the power of aggregation, farmers’ come together, form an organisation, which collectively buys inputs and sells their produce. FPOs makes eminent sense, as small farmers operate nearly 46 per cent of land-holdings and contribute 51 per cent of agricultural output. The marketable surplus from their holdings is small and hence they have less bargaining and staying power in the markets.

The situation is similar world over. The FAO says five out of six land-holdings in the world consists of less than two hectares and produce a third of world’s food. Success of the FPOs is very important as it helps us understand what makes them tick and what’s benficial to their constituents. Performing FPOs usually have about 300 farmer members. There are about 10,000 FPOs in the country.

Alagh’s idea

Former Union Minister YK Alagh who passed away on December 6, was the father of this idea. He suggested amending the Companies Act of 1956 allowing formation of farmer producer companies (FPCs) that would combine the ideals of cooperatives with the business-friendly regulatory framework of company law. However, FPOs can also be registered as societies, cooperatives and trusts.

It is widely believed that the success of FPOs depend on a multitude of factors that include: FPO promoters’, commodity - one or many, daal chawal or niche commodity, value addition and marketing, markets FPOs reach, enabling local governmental ecosystems, capacity building of members, board and CEO.

If one has to winnow these factors and identify the ‘genuine grain’ it is simply the farsightedness of one individual and his ability to take people along — Leadership!

One such leader is Kailash Narayan Singh in Lohradih Village, 90 minutes to Varanasi. Covid-19 forced Singh, a small businessman, relocate as his family owns land there. The village is like any other village in that vicinity. The average land-holding is less than an acre, dependent on ground water, cultivating rice, wheat, arhar, mustard and vegetables and marketing through middle-men. Every household has either a cow or a buffalo.

It was providence that made the promoter NGO zero in on Singh and shared the idea of FPO. The NGO identified a few more people, with small business backgrounds as directors. They all wanted to succeed in the testing Covid-19 times. A FPO was born with about 500 members from 15 villages (1,500 acres cultivated area by 3,000 farmers) and the rest is history! In about a year, the FPO’s turnover touched ₹4.5 crore.

Singh enlisted the pain points of the villages and identified the largest volume of agricultural input procured by the farmers in a participatory way. The answer — animal feed! Supplying 100 per cent genuine animal feed products became their first task. Computerised milk collection centre came next. It took a while for getting the necessary license to stock and sell agricultural inputs and the FPO is now able to meet the needs of 15 villages and nearby villages too. Mandi license was procured next to sell wheat to a big corporate buyer. A responsive local administration provided these licenses. Women from the SHGs are now being taken as members, to factor women’s voices and improving resilience of FPO.

While Singh takes the lead, others members including Gram Sarpanches (some are board members) work closely. When quizzed whether Singh or the Sarpanches have ambitions of becoming legislators, all said no in a chorus.

Much more needs to be done to our villages they averred! The measure of success of FPO programme is the tangible and non-tangible benefits members get.

The writer is Deputy Managing Director, Nabard. Views expressed are personal

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