Development Matters

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Case7-September-2017

Farmers Producer Organisation (FPO) for Sustaining Agriculture

Status of agriculture livelihoods

Despite all the constraints in agriculture, the biggest success of Indian agriculture has been its ability to be self-sufficient in food grains. The significant contributions of green revolution in the last 30 years are as follows.

However, all this does not mean that farmers have no issues or that rural India has solved all its problems. The methods of the Green Revolution often replaced low-impact traditional crop varieties and farming systems that had developed over hundreds of years in consonance with regional soils and climate – without absorbing the accumulated indigenous knowledge. Other prominent losses during green revolution are topsoil depletion, groundwater contamination, the decline of family farms, etc.

Along with these factors, the liberalisation and the rapid change in marketing have increased the gaps between the haves and have nots, thereby the inequality which is seriously expressed in the form of farmers suicides. The death toll increasing day by day and new states are also getting added to the list. The issue has to be recognised rightly instead of arguing for and against on the number and reason for the suicides. It is clearly evident that the farming community is suffering due to low productivity, low income, lack of institutional credit support and low water availability.

The need of the hour is cultivating the hope and building resilience among the farmers by way of introducing and identifying suitable and sustainable technologies/practices for each of the contexts. Climatic change adaptation and mitigation for production increase and marketing should be the core also systems perspective is essential to bring sustainability. The system is envisioned in its broadest sense, from the individual farm, to the local ecosystem, and to communities affected by the farming system both locally and globally. Hence, every individual farmer should be empowered with knowledge and skills and they have to work together to influence the policies and market trends. With this perspective, the producer groups are now promoted by many development organisations for increasing the production and income. Similar to economic movement of women which was achieved through SHGs, farmer’s economic movement has to be started with the focus on introducing sustainable agriculture practices with climatic change adaptation and mitigation.

In a nutshell – establishing economic movement of farmers and bringing the behavioural change among the farmers on the production and consumption practices is the important intervention to be made by all the stakeholders to bring hope to the farmers and to transform agriculture into a viable livelihood option.

Emergence of economic movement of farmers – The concept of producer organisations

With the continuous challenges – (low yield, lack of credit, market asymmetries, etc.) and the absence of an effective organisational structure, farmers, especially the small and marginal farmers are on the verge of either becoming incompetent in the market or find themselves in a captivate position under local buyers or village level brokers. These constraints bring out the need for local collectivisation of farmers. Many other countries which have introduced such structural changes are successful in agriculture production and income and satisfying the demand of the farmers.

Collectivisation helps in introducing economies of scale, bringing down the input costs, better bargaining power and magnifies the voices of farmers as collective voice. The most common form of collectivisation that Indian farmers have adopted over the years are cooperative societies, federations of self-help groups, joint liability groups, farmer clubs, common interest groups. These structures are always been inward oriented, i.e. focusing on the requirements of farmers and acting as a facilitating organisation to them while completely ignoring the outward orientation, i.e. the market needs, suppliers and end consumer demands and changing accordingly. Only few have become successful demonstrations such that AMUL and the reasons for the success of these producer institutions are strong leadership, contextual factors and entrepreneurial traits of a community, legal and environmental support to these institutions and a robust design.

With the need for an institutional structure that consists of ethos of cooperation on one side and the business resilience on the other side, the Government of India came up with a new institutional form called ‘Producer Companies’(PC) in 2003. The PC will be promoted locally and will be networked at larger level like Confederation of Indian Industry and The Federation of Indian Chambers of Commerce and Industry in future. The concept is popularised only from 2013 after successful demonstrations in few of the pockets. This initiative is spearheaded by NABARD and Small Farmers' Agribusiness Consortium (SFAC) and promoted more than 2000 producer organisations for different crops and in different regions across the country. Many resource institutions have been identified and assigned to handhold the producer organisations.

Need of FPOs for Sustaining Agriculture
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