Opportunities for Farmer Producers Organizations in Tamil Nadu

Presented by Dr. J. Diraviam

Programme Coordinator

Krishi Vigyan Kendra, Karur

“Farmers’ organizations should be promoted to combine the advantages of decentralized production and centralized services, post-harvest management, value addition and marketing” - National Commission on Farmers (NCF), 2004.

“Farmers’ Organizations (FOs) are essential institutions for the empowerment, poverty alleviation and advancement of farmers and the rural poor” - (FAO,2006)

Concept of Farmers Producer Organizations (FPOs)

• Farmers Producer organizations are groups of rural producers coming together based on the principle of membership, to pursue specific common interests of their members and developing technical and economic activities that benefit their members and maintaining relations with partners operating in their economic and institutional environment (Anonymous.2004).

Farmer Producer Organizations : Features

• Common interest• Dynamic and flexible, norms and operating

procedures• Both long and short term objectives and plan of

action• Enrolment through membership fee• Democracy through regular elections • Clear and transparent transactions• Capacity of the organization should be strong to

ensure its long term stability and sustainability• Linkages and network with other Farmer Producer

Organizations • Committed leadership

Why Farmers Producers Organizations?

• Farmers Producers Organizations influence policies and demand for required services.

• Farmers can participate in the decision making process of the developmental activities.

• Service system becomes more effective and accountable

• They get better access to latest markets and technology

• FPOs can involve in Farmer and market led extension activities

Why Farmers Producer organizations ?• Build interactions between research,

extension and farming systems• Enable farmers to organize themselves for

action or to share resources• Analyze farmers problems with extension

support• More services can be made available to

farmers through a single point• Provide more effective learning environment

Role of Farmer Producer Organizations

• Representational role• Technology role

• Service role

Types of Farmer Producer Organizations

Community based, resource oriented Farmer Producer Organizations

Commodity based, market oriented Farmer Producer Organizations

THE COMPANIES (AMENDMENT) ACT, 2002

• “Producer Company” means a body corporate having objects or activities specified in section 581B and registered as Producer Company under this Act

Objects of Producer Company

• Every Producer Company shall deal primarily with the produce of its active Members for carrying out any of its objects specified in this section.

Objectives of the Producer Company shall relate to all or any of the following matters:

(a) production, harvesting, procurement, grading, pooling, handling, marketing, selling, export of primary produce of the Members or import of goods or services for their benefit: provided that the Producer Company may carry on any of the activities specified in this clause either by itself or through other institution;

(b) processing including preserving, drying, distilling, brewing, venting, canning and packaging of produce of its members;

(c) manufacture, sale or supply of machinery, equipment or consumables mainly to its Members;

(d) providing education on the mutual assistance principles to its Members and others;

(e) rendering technical services, consultancy services, training research and development and all other activities for the promotion of the interests of its Members;

Objectives of the Producer Company

Objectives of the Producer Company

(f) generation, transmission and distribution of power, revitalization of land and water resources, their use, conservation and communications relatable to primary produce;

(g) insurance of producers or their primary produce;

(h) promoting techniques of mutuality and mutual assistance;

(i) welfare measures or facilities for the benefit of members as may be decided by the Board.

Objectives of the Producer Company

(j) any other activity, ancillary or incidental to any of the activities referred to in clauses (a) to (i) or other activities which may promote the principles of mutuality and mutual assistance amongst the Members in any other manner;

(k) financing of procurement, processing, marketing or other activities specified in clauses (a) to (j) which include extending of credit facilities or any other financial services to its Members.

Steps involved in Registration of Producer Company

1.Digital Signature Certificate (DSC)2.Director Identification Number (DIN)3.Naming of a Producer Company4.Memorandum and Articles of Association5.Documents to be submitted to the ROC6.Certificate of Incorporation and Power of

Attorney7.Tasks to be completed immediately after

incorporation

Input supply

(Seed, fertilizer, machinery)

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FPO

Farmer Producer Organizations (FPOs)Typical range of services provided

How FPOs benefit small producers

1. Aggregating smallholders into FPOs proven pathway to increase investment, improve bargaining power, move up value chains and improve access to technology, markets.

2. Aggregation only way to enable SMF to exploit emerging opportunities domestic and global by integrating with SMEs; retail chains

3. Climate change coping mechanisms and risk mitigation requires aggregated platforms for efficient delivery

4. Aggregation will facilitate more effective targeting of subsidies to farmers

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Opportunities for FPOs – Nadayanur Agricultural Producers Co. Ltd.

• Inputs dealership – Fertilizers and pesticides• Farm implements – custom hiring • Cattle feed and raw materials for feed

preparation• Tapioca – starch measuring scale • Copra and shell direct procurement and sale• Milk purchase and retail sale (additional price

of Rs 5/lit.)

Opportunities for FPOs – Nadayanur Agricultural Producers Co. Ltd.

• Procurement and sale of organic jaggery• JLG formation and credit linkage for milch

animals• Training programmes on Azolla cultivation,

livestock (ethnovet practices) and Coconut through – VUTRC, KVK, Vivekananda Kendra

Vellingiri Uzhavan Producer Company

• Direct harvesting and dehusking of coconut – teams developed and direct sale in Kangeyam

• Drying yard for Copra• Inputs dealership – Fertilizers and

pesticides – wholesale and retail licences obtained

• Farm implements – custom hiring only for members – JCB, tractor

Vellingiri Uzhavan Producer Company

• Kisan Credit Card for all members – organized

• Farm Advisory services, soil testing, trainings arranged and Market information provided through SMS.

• Future plans: Coconut Oil production and sale in domestic market, forward and backward linkages for Arecanut

Theni Banana Producers Company Ltd.,

• Incorporated a Company named ad 'Farm Fresh Banana Pvt Ltd' and established 600 MT cold infra, ripening chambers and Pack Houses. Income of the farmers have gone up from Rs.1 lakh to 2.5 lakhs / acre. The entire production system has gone Hi-Tech to generate uniform fingers and hands and two container loads per week are exported to European Market.

Erode Precision Farm Producer Company Ltd.,

• Supply of quality inputs • Technology support in vegetables production

with no residual toxicity. • Established an Indian Oil Corporation Fuel

outlet under Kisan Seva Kendra Scheme to benefit the farmers by supplying quality fuel to farm machinery.

• Vegetables are being grown in 200 acres for exporting to Maldives. The firm is having dealership for 15 major companies including M/s Jain Irrigation.

Dharmapuri Precision Farm Agro Services Ltd.,

• Establishment of 12 registered vegetable clusters for sharing the experiences and visiting markets like Chennai, Cochin, Azadnagar New Delhi, Pune and Nasik.

• Supply of quality inputs. • Now, the company sells farm inputs, arranges

buy back tie-ups and conducting market exposure visits to farmers. The firm is having dealership for 7 major companies including M/s. Jain Irrigation.

Cumbam Valley Grape Growers Company Ltd.,

• Supply of quality inputs. • Capacity building of farmers on Hi-Tech

farming.• Establish pack houses at farm end and

retail outlets in Highways. • Establish unit for processing and value

addition.

Ulavan Producer Company Ltd

• Electronic turmeric auction center at Erode for maximum participation of traders and price discovery in a transparent manner

• Grading, sorting, packing with total transparency and issue of certificates of stocks against which the farmers can avail bank loan.

• All communications and bidding shall be through mobile and on-line.

• The future business plan includes establish units for curcumin, oleoresen and curcumin powder.

Tamil Nadu Flower Growers Association (Under conversion to Producers Company)

• Daily price for the flowers is fixed by the Association after ascertaining the demand from Mumbai, Chennai, Bangalore, Mysore, Dubai and UK.

• There is no commission collected from the farmers and the payment is immediate.

Coimbatore District Vegetable Growers Association

• Price for the gourds is fixed by the Association once in fifteen days after ascertaining the market demand.

• Direct Marketing through one market outlet within Coimbatore City.

• Convergence: Participation in peri-urban vegetable cluster project under National Horticultural Mission for Coimbatore with provision for packhouses, transport vehicles and furnished retail market outlets within the Coimbatore city for direct marketing.

Thiruvalluvar Farmers Producers Company Ltd.,

• Supply of inputs• The company's future business plan is to

produce and supply of quality inputs, build up of the capacity of farmers for Hi-Tech farming practices

• We plan for establishing a processing unit for processing and value addition in coconut .

Palaya Ayakkudi Koiyya Sagupadiyalarkal Sangam

(Ayakkudi Guava Growers Association

• Introduction of Hi-Tech Production system for production of uniform sized fruits, weighing 300 grams each.

• Better price realization by sorting and packing for Gulf Market.

• Apart from Export, the major fruit retailers of Coimbatore are buying regularly from the farmers.

Tamil Nadu Mango Growers Federation• The capacity building training was given on Organic

Farming, GAP certified farm and Grading and Packaging of Mangoes.

• There are 3 GAP certified orchards in Tamil Nadu which generates 3 times the profit of the conventional orchards. The production system upgraded 100 % and many Ultra High Density Plantations are established.

• Now, the federation is making effort to convert all the association into Krishnagiri Mango Producers Company and promote branded Mangoes as 'KrishMa' meaning Krishnagiri Mango.

• Further, effort is on to establish retail market and own pulping unit on the four lane roads of the state.

Nallakeerai NALLA SANDHAI PRODUCER COMPANY

LIMITED• Five Information Technology (IT) executives

have decided to enter into Agriculture on leased lands exclusively to produce toxin free organic vegetable greens for supply to chennai metropolitan city.

• Direct marketing is the target and the consumers preference is positive for the produce, logistics are being worked out to expand the area and make deeper in-roads into city market.

Success of Farmer Producer Organizations…

Recognition it gets from various bodiesPolicies of GovernmentFocus on income generating activitiesAbilities of membersVisible benefits to its membersExtension officials attitude and supportParticipatory approachesLinkages with people and organizationsTie up with other development programmesInter group linkages Capacity building of farmers

Ecosystem for

sustainable FPO

Marketing

EGCGFSInfrastructur

e

Retailing

Services (Technical)

Credit

HRD

Link to Consultant

Banks

PHI/VIUC

GBY

VCA

NMFPRKVY/PPIAD

Retailers/Processors

MSP

NSPOT/NCDEXSFI/GVT HR Plan

FPOs as sourcing point for rural products

FPOs as rural retail points for consumer products/services

CSC

Banks

NBFCs

InputsBDS/ERPWHRMechanizationKrishidoot

Evolution of Producer Company in India

Producer Company

Producer Company

Corporates

Promoters: NGOs, DDs,

Sponsors

Advisory service, supply, Procurement, Collective marketing

Stage I

Retail partnership

Stage II

Stage III

Producer companies with own infrastructure for processing, brand identity and marketing

Summary• The purpose of establishing Farmer Producer

Organization (FPOs) is to internalize extension services for its members and provide: – Backward linkage (input, credit and technology) – Forward linkage (production facilities, market and value addition).

• The FPOs provide an effective channel for both dissemination of technology to large number of small and marginal farmers and feedback to research and extension.

Summary

• Producer companies can help smallholder farmers participate in emerging high-value markets, such as the export market and the unfolding modern retail sector in India.

• In this environment of greater instability and competition, organization and collective action can help to enhance farmers' competitiveness and increase their advantage in emerging market opportunities.

Conclusion

• Sustainable organizations are must for over all development

• Extension strategies should involve FPOs• Public, Private extension agencies and NGOs

should involve FPOs• Govt departments should play a supporting role

in formation and management of FPOs• Extension functionaries should have skills of

facilitation

Thank You

Inauguration of Seed Processing Unit of Nachalur FPO by District Collector and NABARD CGM