Indian Society of Agribusiness Professionals & Farmer Producer Organization (FPO): The Need of the Hour and the Real Game Changer

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posted on April 10, 2022 | Author DR. NAQEEB RAJA

The roots of poverty in agricultural and horticultural communities are complex, and any approach to improving it must be adaptable to address the problems farmers face. This is why the “Indian Society of Agribusiness Professionals” (ISAP) takes a long-term holistic approach offering a variety of approaches, also in tandem with affiliated partners, if necessary, to inform, train and support farmers, women and youth in rural communities. .) and it is the need of the hour for farmers in my Kashmir valley to understand its need and then learn, formulate and participate in creating FPO and then use it to its maximum level. Now we need to understand what FPO is basically, what is the need for FPOs in Kashmir Valley and how it is a game changer. As majority of marginal and small farmers face heavy suppression by middlemen/commissionaires for remunerative price and profitable income, FPO could be an ultimate solution to the problem. Support from ISAP in the management of the FPO will be a boon to the farming community in Kashmir.

Kashmir Valleys 80% of the population is directly or indirectly involved in agriculture, horticulture and other similar activities (floriculture and vegetable growing). Spring-summer paddy cultivation involves almost 40% of Awal Darja (first class irrigation) land use in rural areas. Almost 20% of the non-irrigated and rain-dependent land grows mustard, barley and wheat, maize (maize). Horticulture directly accounts for almost 25% of the land for the cultivation of apples, walnuts, pears, almonds and other varieties of prunus (plums, peaches and cherries). The fruit industry alone is worth 7000 Crores and employs 6 Lac people either directly or indirectly.

Being monopolistic in the production of red gold #Safran and Apple why is the “Kashmir Farmer” still suffering? Why is he unable to increase his import and export margins? Why are the majority of “marginal and small Kashmiri peasants” not able to improvise their economic standards? Where is the gap? Should we blame the Departments for not increasing their direct participation in improving the package and practices or are the climatic conditions too harsh to make it very difficult for a farmer to maintain the level of freshness of his product? final which is desirable for the consumer or is the farmer himself responsible for being a laggard and not being too scientific or is the Kashmiri farmer not having the smart approach towards the facilities that government and private organizations provide?

Marginal and small farmers with low bargaining power suffer from greater dependence in cultivation and monopoly farming under formal contracts and to minimize the gap between farmers and consumers, the Indian government has aimed new institutional options that can provide farmers with a level playing field to compete in modern agrifood networks. With the recommendations of the YKAlagh Committee in 2001, amendments were made to the Companies Act 1956 which paved the way for the concept of “producing companies” (PC). CP can increase the skills, incomes and bargaining power of smallholder farmers in the production and marketing of products. They disseminate technical knowledge to its beneficiaries, improve their production efficiency, reduce transaction costs, market the final product and even manage to build their capacities, thus manufacturing social capital.

In the era of globalization and climate change, producer organizations are seen as the only institutional option to safeguard farmers’ best interests and help them achieve a higher level of profit through new agrifood networks. The SFAC is the nodal coordination agency between the states and the single window for technical advice and investment needs. The Producer Organizations Development Fund (PODF) was created by NABARD to specifically promote FPOs (Agricultural Producers Organizations) that are not covered by SFAC. As a major reform, the Indian government has announced a hundred percent tax holiday for all FPOs below 100 crores for up to five years. Producer organizations can evolve as a major step towards “doubling farmers’ incomes”.

What is the meaning of FPO? It is a type of producer organization (PO) whose members are farmers. The Small Farmers Agrifood Consortium (SFAC) supports the promotion of OPAs. PO is a generic name for an organization of producers of any product, for example, agricultural products, non-agricultural products, handicrafts, etc. FPO is a legal entity formed by a group of farmers or primary producers, namely: agricultural farmers, milk producers, fishermen, small tea growers, weavers, artisans, etc. An FPO can be a production company, a cooperative society or any other legal form that provides for profit/benefit sharing among members. What is the need for FPO? The main objective of the FPO is to ensure a better income for the producers thanks to an organization of their own. Small producers and marginal producers do not have the volume individually (both inputs and outputs) to benefit from economies of scale. Furthermore, in agricultural marketing, there is a long chain of intermediaries which very often leads in a non-transparent way to the situation where the producer receives only a small part of the value paid by the final consumer. Through aggregation, primary producers can benefit from economies of scale. They will also have better bargaining power vis-à-vis large buyers of products and large suppliers of inputs.

Conclusion: As the majority of marginal and small farmers face heavy suppression by middlemen/commissionaires for remunerative price and profitable income, FPO could be an ultimate solution to the problem. A growing contribution from promotional institutions is of utmost importance for education, business planning and business ties with various national and international companies. Support from ISAP in the management of the FPO will be a boon to the farming community in Kashmir.

(The author holds a PhD in agricultural extension and communication)

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