Formation and Promotion Farmers Producer Organisations (FPOs)

Background

There are more than 12.5 million farmer families in India, out of which there are more than 85% small and marginal farmers whose size of land is less than 1 hectare. Agriculture land holding in the country is dominated by small and marginal farmers. These small and marginal farmers (SMEs) face some challenges both in production and post-production like access to production technology, quality inputs at reasonable rates, credits, custom hiring, seed production, value processing, investment and most importantly market access.

Realising the significance of FPOs under the Central sector scheme” Formation and Promotion of 10000 Farmers Producer organisaton started to serve the farm economy and formed for the purpose of leveraging collectives through economies of scale in production and marketing of agricultural and allied sector.

Project:

Farmer producer organisations (FPOs) project is being implementing by CUTS Centre for Human Development All these FPOs are is incorporated/ registered under Part IXA of Companies Act, these FPOs are located in Six blocksnamely Bayana, Deeg, Kumher, Kaman, SevarsmfNagar of Bharatpurdistrict and Six blocks of Chittorgarhnamely Bengu, Nimbahera, Chittorgarh, Bhadesar, Badi Sadri and Gangrardistrict of Rajasthan state and Two FPOs are at Talwara and Sajjangarh in Banswara district, Rajsathan State.

Our Ten FPOs, Comprising Six in Bharatpur and Four in Chittorgarh district of Rajasthan are supported by Small Farmers’ Agri-Business Consortium (SFAC), Department of Agriculture, Cooperation and Farmers Welfare, Ministry of Agriculture and Farmers Welfare, Govt. of India and Four FPOs, comprising two in Chittorgarh district and two in Banswara district are supported by National Bank for Agriculture & Rural Development (NABARD)

Duration

The duration of the project is forfive year, i.e. March 2021- March 2026

CUTS as a Cluster- Based Business Organization (CBBO)

CUTS will form and promote FPOs as per their requirements and to ensure that professionally competent in promotion and professional supports to FPOs

CUTS will be going concern with professional experience and exposure in formation of FPOs in agriculture and allied sector and providing handholding support to them and would support with five categories of specialists from the domain of (i) Crop husbandry; (ii) Agri. marketing / Value addition and processing; (iii) Social mobilization; (iv) Law & Accounts; and (v) IT/ MIS in agriculture & agriculture marketing and the organisation will also use other inhouse technical and supporting staff.

Duties and Responsibilities of CUTS

  • Assist to SFAC and NABARD (agencies) in cluster identification and implementation of the programme
  • Community mobilization – baseline survey, cluster finalization, value chain study, formation of groups and FPO and assist in their periodic meetings. seeking the assistance of Local Bodies, wherever feasible in identification of proper produce cluster and mobilization of members.
  • Registration of FPOs and Training of Board of Directors (BODs) on roles, responsibilities, management and also capital/ equity mobilization.
  • Training and capacity buildings of FPOs/farmer groups- Training needs identification, develop training modules, conduct basic training workshops and exposure visits.
  • Encourage and promote social cohesiveness amongst members of FPOs.
  • Preparation and execution of Business Plans for long-term sustainability of FPO- Business plan preparation (for different incubation services), acquiring land, mobilizing equity capital and implementation of Business Plan while assisting in input management, adoption of proper and good agricultural practices through knowledge sharing, aggregation of produce, quality management, assaying, processing, packaging, supply chain development and marketing and market linkages with buyers/processors/exporters, trading, export etc as may be necessary to ensure long-term sustainability of FPOs.
  • Regular interface with stakeholders like various Government Departments, Financial Institutions, Training, Research and Development Institutions at the cluster level.
  • Assist FPO in availing Equity Grant and Credit Guarantee Facility as per need and growth.
  • Incubation/handholding services for sustainability – Provide support and monitoring in terms of incubation activities; capacity building of BODs and FPO management for sustainability. The incubation/handholding services include ensuring input, market linkages, preparing and implementing related business plans.
  • Facilitate establishment of necessary common pool production, marketing and processing infrastructure facility by the FPO, as may be necessary, to develop the business for long-term viability.
  • Facilitating traceability, compliance and global market connectivity.
  • Review and monitoring of the field team during implementation as per desired outcomes.
  • Assist in communication and dissemination of information to farmers by way of market and crop advisory.
  • Ensuring programme/project targets are met.
  • Assist in compliance issues of FPO including their capacity building in the subject.
  • Assist to Implementing Agencies in data collection and generating MIS reports/information in the required data sheets.
  • Assist in federating FPOs when necessary for business growth and expansion.
  • Assist FPO in proper financial management and utilization of fund and accounting and timely submission of returns and certificates.Any other activity related to implementation, management and monitoring of the project.

Broad Activities would be undertaken

The FPOs may provide and undertake following relevant major services and activities for their development:-

  • Supply quality production inputs like seed, fertilizer, pesticides and such other inputs at reasonably lower wholesale rates.
  • Make available need based production and post-production machinery and equipment like cultivator, tiller, sprinkler set, combine harvester and such other machinery and equipment on custom hiring basis for members to reduce the per unit production cost.
  • Make available value addition like cleaning, assaying, sorting, grading, packing and also farm level processing facilities at user charge basis on reasonably cheaper rate. Storage and transportation facilities may also be made available.
  • Undertake higher income generating activities like seed production, bee keeping, mushroom cultivation etc.
  • Undertake aggregation of smaller lots of farmer-members’ produce; add value to make them more marketable.
  • Facilitate market information about the produce for judicious decision in production and marketing.
  • Facilitate logistics services such as storage, transportation, loading/unloading etc. on shared cost basis.
  • Market the aggregated produce with better negotiation strength to the buyers and in the marketing channels offering better and remunerative prices.
  • A Business Plan Linked development in both medium and long-term to hallmark of strong business growth for FPO.

Strategy for Formation of FPOs

Formation and promotion of FPO is based on Produce Cluster Areafor purpose of FPO formation and management herein means a geographical area wherein agricultural and allied produce such as horticulturalproduce of similar or of almost similar nature is grown / cultivated; therefore, an FPO can be formed for leveraging economies of scale in production and marketing. This will also cover Organic Produce and Natural Farming.

Produce cluster area is to be identified with the input of District Level Monitoring Committee (D-MC), State Level Consultative Committee (SLCC), other Ministries/Departments of Government of India and the States as well as with recommendations of Implementing Agencies with input from Cluster- Based Business Organization (CBBO) and suggestions of relevant Government of India Organizations.

CUTS will undertake Feasibility Study in assigned clusters which will include the following:

(i) Diagnostic study including Baseline survey to find out produce and socio- cultural similarity, existing gap and potential activity, interventions in terms of infrastructure, services, etc. required in the value chain of agricultural and horticultural produce including post-harvest management and marketing. Baseline survey should also identify current situation of farming, small, marginal and landless farmers for aggregation, to identify minimum geographical area for potential interventions etc.

(ii) Prospective Business Plan in order to establish a fit case for formation of an economically sustainable FPO.

FPO withfarmer-members’ size of 300-1000, Farmer-members cohesively located with almost same interest are to be mobilized to form a group of 15- 20 Members, calling the group as Farmer Interest Group (FIG) or Self Help Group (SHG), Farmers Club (FC), Joint Liability Group (JLG), based on certain commonalities are to be put together to form an FPO with a minimum farmer-members size of 350 It may provide special focus to include small, marginal and women farmers/women SHGs, SC/ST farmers and other economically weaker categories etc. as members to make FPOs more effective and inclusive.

The FPOs can federate at district level and State level based on their need of processing, branding and marketing of produce/trading of commodities, which are essential for scaling up for survivability and growth in an era of competition. Based on their need, success and product, they can federate at the National level also to promote packaging/branding and domestic/international trading of quality produce. Such Federation may avail advisory of National Project Management Agency (NPMA) as well as will be eligible for Credit Guarantee facility under the Scheme to strengthen their activities relating to setting up of infrastructure and supply chain for value addition and marketing.

While adopting cluster-based approach for produce or produce mix, formation of FPOs will also focus on “One District/One Cluster One Product” approach for development of product specialization, in case the focused agriculture produce has been declared for that district, whereby FPOs will be encouraged for promoting processing, branding, marketing and export of the product for better value realization. There may be more than one cluster for one product in one district. However, to be an FPO economically sustainable and diversify risk & enhance returns, the FPO will also have additional product and service mix; so that there are enough activities and engagements with the members throughout the year. Furthermore, FPOs can federate at district level, State level & National level for the product identified as per their requirement of processing, branding and marketing. .

Training and Capacity Building for Promotion of FPOs

Capacity building, training and skill development of CEOs/ BoDs and other stakeholders identified by Nodal training institution, through transfer of technology, innovation is very essential for on self-sustainable basis. The transfer of technology and innovation, inter alia, includes entire vertical and horizontal aspects of agricultural value chain, managerial aspect including accounting with focus on value addition, processing, and marketing.

The subject matter of training will cover topics ranging from Organisational management/behaviour, crop husbandry, value addition, processing, marketing, trading, export, supply chain, grading, branding, packaging, accounting, auditing, compliance requirements, incubation, ICT & MIS as may be relevant for promotion of FPOs including case studies in best practices if any.

More information available at http://sfacindia.com/FPOS.aspx and https://www.nabard.org/contentsearch.aspx?AID=95&Key=FPOs