10 Nov 2020
Farmer Producer Organizations are groups or aggregations of farmers that provide a higher bargaining power to farmers and helps them realise benefits from economies of scale. Launched initially by the Department of Agriculture, Cooperation & Farmers’ Welfare (DAC&FW) as a pilot project for promoting collaborations with farmers in 2011-12, the Farmer Producer Organizations (FPOs) in India have now become a critical element in the Government’s bid to ensure economies of scale for farmers in the country. This can be ascertained by the fact that in the 2019-20 budget, the Government of India announced plans to promote 10,000 FPOs in the next five years. In February this year, a ₹6,685 crore scheme titled ‘Formation and Promotion of 10,000 Farmer Producer Organization (FPOs)’ was officially launched by the Prime Minister.
The global pandemic has impacted Indian FPOs’ strength significantly. While market linkage opportunities for FPOs selling fresh produce was impacted by the logistics challenges, FPOs involved in primary processing were impacted by the lack of selling opportunities through retail outlets, fairs etc. Government of India’s recent reforms towards allowing direct procurement opportunities from farmers and FPOs, which will allow farmers an increased choice of selling channels, will greatly benefit the farmers.
CII endorses the view that aggregation of farmers into FPOs will improve their access to investments, technology, inputs and markets which in turn would increase their income levels. This will also build resilience for the agriculture sector in India going forward, insulating it to future shocks.
To overcome the challenges faced by FPOs regarding long term hand holding, the Business Service Unit for FPOs was launched by CII in 2019. Aimed at capability building of FPOs and forging market linkages, the first phase, launched in Uttarakhand, saw 1,500 women members of the FPO benefitting through interactive trainings on post-harvest value addition and marketing as well as B2B meetings for market linkages.
CII also aims to create clusters of all women FPOs that can serve as a model to be replicated across the country. The first all women FPO, initiated in Cuddalore is promoting farm-based enterprises from production to marketing.
CII plans to scale the Business Service Unit for FPOs across India now. 9 value chains, namely rice, maize, soybean, pulses, banana, potato, tomato spices and red chilli have been prioritized under the program and 11 companies have already signed up to engage with the FPOs. Under the program over 50,000 farmer families are expected to be impacted by 2021 and nearly 200,000 farmer families by 2023.
It is also proposed to support the program with a multi feature digital platform which will be a one-stop-solution for FPO members to gain information on new input solutions, innovative technology solutions and information on Govt schemes etc. Also, it will be a platform for digital delivery of capacity building programs for FPOs on good agricultural practices, specified trainings on marketing, branding, post-harvest practices, hygiene and sanitation practices, food safety, nutrition, etc towards further empowering business acumen. The portal will also be leveraged to help FPOs get connected with organized value chains and will provide FPOs a platform to showcase their produce. CII will link the platform to its existing Ag-Tech start-up platform to connect with nearly 80 start-ups whose value chain specific offerings have been mapped.
The portal will be beneficial for both FPOs and Industry including retailers, processors, input players, mechanisation companies, and start-ups. All services will be free for FPOs and the platform can be accessed to showcase produce/products for direct market linkage opportunities with Industry.
With improved market linkages, we will also see a shift in what our farmers produce. For a long time now, India has been self-sufficient in many crops, including rice and wheat. An increase in understanding of market demand and trends, through direct engagement with agribusinesses, will enable farmers to grow crops with higher market value and reduce dependency on imports.