India is home to about 120 million smallholder farmers who contribute over 40% of its grain production and half its fruits, vegetables, oilseeds, and other crops. Much of the global share of food staples such as rice and wheat come from India, and almost half of the population in India depends on agriculture for their livelihood.
Every year, Indian farmers face risks such as low rainfall, price volatility, and rising debts. But risks from the COVID-19 pandemic are putting new challenges in front of a sector that is already under threat. The nationwide lockdown came at an unfortunate time for farmers, as it was the harvest season for the rabi (winter) crop. The lockdown created both a shortage of labour and equipment – migrant labourers in India usually move to rural areas during harvest. Smallholder farmers (smallholdings are usually farms supporting a single family with a mixture of cash crops and subsistence farming) often rent harvesting equipment as this is cheaper than purchasing it.
Consequently, farmers have not been able to harvest their bumper crops of cereal and oilseeds this season. In some places, the crops have been abandoned, while in others, the harvest is coming more than a month late in hand with limited and more expensive labour.
India claims to be self-sufficient in food production but facts say otherwise. All the food we produce, doesn’t matter if they are abandoned or exported – it is an enormous amount of items. In addition, it was estimated that although India’s food bank had more than three times the minimum operational buffer in stock, supply and access is a critical issue. Long supply chains have been severely affected, especially at the beginning of the lockdown when transport was restricted. Drivers abandoned trucks full of produce in the middle of interstate highways. Markets eventually started running short of supplies, owing to food rotting in transit or never making it to the point of sale.
Is there a saviour for this issue? Read on to find out how interesting is the impact of Farmer Producer Companies on the Indian agricultural sector.
What is a Farmer Producer Organization?
A Farmer Producer Organization or an FPC is an entity formed by primary producers like farmers, milk producers, fishermen, craftsmen, etc. It is an organization established by the primary producers for the economic development of themselves.
There are many legal forms to establish a PO (Producer Organization), such as:
- Co-operative societies (including Souhardha’s in Karnataka and Multistate multipurpose co-operatives)
- Producer companies under Companies Act, 1956
- A non-profit organization under Company Act, 2013 (Section 8 Companies)
- A Society registered under Societies Act, 1960
- A charitable trust registered Indian Trust Act, 1882
Among these, farmer producer companies and cooperative societies are more preferred forms as they provide the opportunity to share the profits in dividends with members, and these are globally competitive.
Farmer producer companies will act as the bridge between the market and producers. Farmers have the ability and expertise to produce but lack marketing skills and support. This is where the role of FPCs comes into play.
Some initiatives by FPCs to safeguard small household farmers
Aadhimalai Farmer Producer Company
Aadhimalai Farmer Producer Company was formed in the year 2013. Starting the FPC was to detach the intermediaries between the farmers and consumers and provide the ownership feel for the tribal farmers for the product they produce. The company’s primary goal is to make sustainable farming since tribal people use forestry resources to produce products. And at the same time, it makes the farmers earn a maximum profit for the products they make. Currently, the company is working with 3000 tribal families from 160+ villages in Tamil Nadu, converting them as shareholders. It sells 16 varieties of honey, jam, millets, health products, pickles, etc. The company initially had four stores to sell its products, and now each of the stores has become a separate independent society. The company’s long-term goal is to convert its four production centers used for processing and bottling into separate entities.
Conjeevaram Organic Producer Company Ltd.
Conjeevaram Organic Producer Company Ltd., also known as COPCL was started in the year 2015. The company has different brands under it. They are :
- Farm School
- SM Organic Inputs
- Community Farming
- LN Organics
- Hindu Iyakkam
The company’s main motive is to leverage the power of 1000 farmers and provide support to the people doing organic farming. COPCL farmers are said to be the farmers of the new generation. The company’s objective is to focus mainly on the organic farmers from Kanchipuram, Chengalpattu, and Maduranthagam district in Tamil Nadu. The company has nearly 8 directors, and each director supports nearly 50 to 60 organic farmers. In total, the company is currently supporting 500 to 700 organic farmers from the above-mentioned districts.
The vision of COPCL is to provide poison-free food to the people. The company is mainly providing a support system to the organic farmers for organic inputs like vermicompost. The company has a long-term goal to create new farmers in organic farming and build a support system for the new generation of farmers. It is planning to conduct a training program for people interested in farming but have zero knowledge about the field.
SBAGS International Farmer Producer Company
SBAGS was started in the year 2019 with the motive to incorporate technology in the field of agriculture. The two main motives of the company are to help the farmers get the desired value for their products and incorporate technology in agriculture. Initially, the company was started with 10 members. Currently, the company holds 300 plus farmers working with them. It has links with nearly 12 other FPCs across the country.
The company took this initiative to be an aggregator and integrator platform to connect their farmers to the market. In India, only 15% of the farmers are using technology in their agricultural processes. The company aims to increase the count. Currently, nearly 300 to 350 farmers are using their technological services in farming. The company also runs an awareness campaign to create awareness among the farmers about the benefits of using technology in farming.
Role of technology in improving the productivity of Indian agriculture sector
Integrating weather forecasts into the agriculture process also helps improve the logistics around harvesting and transportation. Weather and soil analytics can predict and specify when fields will be least affected by the weight of harvesting equipment and which fields workers should be deployed to. It can also help predict which distribution routes will be affected by rain and upcoming weather changes, especially in countries where roads are dirt and heavy rain can cause trucks to get stuck in mud.
Product recalls also contribute to damage and waste — and they happen a lot. As studies suggest, in many cases, up to 50 percent of recalled food items are not contaminated, which ramps up costs and causes a lot of good food to go to waste. The reason is that there isn’t enough visibility into the supply chain. Federal regulations mandate that firms have traceability one step up and down the supply chain, but this isn’t sufficient for food items and perishable products, which move very quickly across the chain.
Optimised supply chains
An evident advantage of digitizing supply chains is that it creates a digital record of all the activities and improves the capability to internally track and document all activities from production and harvest warehousing and distribution. Therefore, this makes the supply chain more transparent and offers better control over operations to all the stakeholders. It facilitates them to address pain points, such as loss or wastage, and identify opportunities to accelerate processes and make them cost effective.
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