Dr. Pawan Kumar Sharma
While remembering the childhood memories, a story always comes to my mind wherein a father demonstrates to his children that sticks in a bundle can’t be broken but stick taken singly can be easily broken. Working with small and marginal farmers which constitute more than 80 percent of farming community in India, I assume the importance of childhood story for bringing farmers together for their sustainable livelihood.
Farmer Producer Organisation (FPO) is a concept and scheme formed by primary producers, farmers, milk producers, fishermen, weavers, rural artisans and craftsmen etc. FPO assumes the status of legal entity in the form of a producer company, a cooperative society or any other form for sharing of profits/benefits among its members. In some forms like producer companies, institutions of primary producers can also become member of FPO. The main aim of FPO is to ensure better income for small producers through an organization of their own. The ownership of the FPO is with its members. A Farmer Producer Company (FPC) on the other hand, is a multi-object entity registered under Indian Companies Act, 1956, as amended in 2013. It is a hybrid between cooperative societies and private limited companies. A Farmer Producer Company can be formed by any 10 or more primary producers or by two or more producer institutions, or by a contribution of both. They can undertake activities related to production, harvesting, procurement, grading, pooling, marketing, processing, etc., of agricultural produce. The Farmer Producer companies have democratic governance, each producer or member has equal voting rights irrespective of the number of shares held. There is a limitation on the amount that can be distributed as dividend. Profit is largely distributed on the basis of “patronage”, which acts as a reward for members contributing to the business. There can be 5-15 directors and expert directors can be co-opted for professional guidance.
Any individual or institution can promote a FPO. Individual persons or institutions may promote FPO using their own resources out of goodwill or with the noble objective of socioeconomic development of producers. If, however, the facilitating agency wishes to seek financial and other support, then they have to meet the requirements of the donor/financing agency.
Ministry of Agriculture & Farmers’ Welfare, Govt. of India has modified the provisions to introduce new FPO scheme for targeting the establishment of 10000 FPOs in the country, without any particular highest numbers set for individual state. So, states/UTs have exclusive opportunity to promote the welfare of farmers through formation of FPOs.
The UT of J&K has a very limited number of functional FPOs, which infact should be more keeping in view the difficult terrain, marginal holdings and poor resources in terms of capital and infrastructure at farmers’ level. The scheme of FPO therefore provides an opportunity for the farmers of J&K when combined with other centrally sponsored schemes such as Atmanirbhar Bharat, TOP to Total, National Agriculture Market (e-NAM), Prampragat Krishi Vikas Yojana etc.
But one should also look at the problems that have limited the formation of FPOs in J&K until now. Among the major issues impeding the growth of FPOs are the lack of awareness among farmers about their process of formation and way of functioning, lack of social participation/ cohesiveness, lack of communication and absence of startup capital and marketing avenues. The insufficient marketable surplus remains the biggest challenge for formation of FPOs in J&K. Therefore, one should focus and recommend multi-object entity for farmers of J&K. FPO can involve in production and marketing of multiple products for their survival through generation of sufficient employment and economic benefits.
Keeping in view the constraints faced by farmers in forming FPOs, Government has made certain changes in the scheme. The minimum members per FPO in case of plain areas are 300; whereas in North-Eastern and Hilly Region, it is just 100. Out of the total farmer members in a FPO, 50 per cent should be small, marginal and landless tenants with maximum possible representation from women farmers. Under the scheme, adequate support is extended to the States of North East and hilly areas to offset deficiency in specialized manpower and expertise available in such areas. As per the new guidelines, the Farmer Producer Organisations (FPOs) will be given a maximum of ?18 lakh in the formative years, apart from an equity grant of up to ?15 lakh and a kitty for meeting administrative expenses, including salaries of key personnel. The Government has also made provisions from financially supporting CEOs and accountants appointed by these FPOs for a maximum of three years. While the CEOs can be given up to ?25,000 from the funds provided by the Government, accountants can draw a maximum of ?10,000. In earlier FPOs, this remuneration available to CEOs was a maximum of ? 10,000. FPOs shall be supported by central organizations such as National Bank for Agriculture and Rural Development (NABARD), Small Farmers Agribusiness Consortium (SFAC) and National Cooperative Development Corporation (NCDC).
The implementing agencies should form and promote FPOs through Cluster Based Business Organizations (CBBOs) on the principle of ‘One District One Product’ to promote specialization and better processing, marketing, branding and export. CBBOs shall provide end-to-end knowledge for all issues in FPO promotion through five categories of specialists from the domain of crop husbandry, agri-marketing/value addition and processing, social mobilisation, law & accounts and Information Technology /Management Information Systems. There is also a provision of equity grant for strengthening equity base of FPOs.
Speaking about Jammu region of J&K, the district wise products which can be considered under ‘One District One Product’ principle for developing FPOs should be chosen carefully keeping in mind the surplus available with farmers for marketing, e.g. Milk and milk products, basmati rice for Jammu, pulses, mushroom for Samba, rice, mushroom for Kathua, milk & milk products, vegetables for Udhampur, organic vegetables, flowers, honey for Reasi, anardana, maize for Ramban, apple, walnut, for Doda, saffron, walnut for Kishtwar, anardana, maize for Rajouri and pecannut/walnut, maize, rajmash for Poonch districts.
Since self-reliance of farmers depends upon the efficiency of group dynamics, FPOs undoubtedly the key for enhancing farmers’ income and boosting agricultural growth. All stakeholders need to scale-up the mass awareness, provision of critical support and development of effective linkages for the promotion of FPOs in J&K.
(The author is Scientist (Agricultural Economics) Sher-e-Kashmir University of Agricultural Sciences & Technology of Jammu)
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