erprise
entrepreneurial
COOPERATION Krishak Bharti members ’ farms in Delhi ( left ), strawberries being sorted and graded
organisations . The process of getting started can take up to three years .
C . Rama Gopal , a consultant working with the SFAC , says many farmers are not aware of the FPO structure or its potential , which is why , for example , there are no more than three or four FPOs in Vizianagaram district near Vis akhapatnam . Due to this lack of awareness , their activities remain res tricted , and thus they cannot bring a whole host of possible advantages to the member farmers and others in the vicinity . “ Though there is an AP Food Processing
Society , it is not taking any initiative to promote FPOs which could help in better procurement and management of food produce . Further , the farmers too could benefit if they are able to collectively bring their produce to the mandis and use the e-facilities of marketing to garner a better price ,” says Gopal .
S . S . Baskar , who oversees the operation of around 60 FPOs that are promoted by Vrutti Livelihood Resource Centre in Karnataka and Tamil Nadu , says the effort is to get around 1,000 farmers from 8-10 villages to set up a FPO . Further , within an FPO , smaller groups of 10-20 members with common interests are formed . This helps farmers to bring down input costs thr ough shared resources including farm equipment , and through the aggregation of produce for sorting and grading before marketing .
Most FPOs initially focus on the handling of seeds , fertilisers and pesticides , besides providing farm equipment for hire . The difficulty comes in meeting the statutory requirements — for example , some of the CEOs consulted say that you need a member with a BSc in Chemistry if you want to get a pesticides licence . The advantage is that due to the volume of requirement , the input costs — whether seeds or fertilisers — come down by 10-15 per cent . Further , the effort of going to town to get good quality seeds in adequate quantity is done away with . “ Bulk buying and selling reduces transportation cost , amali ( labour charges ), and commission costs ; in some cases , transportation costs are done away with as the sale happens at the cluster level . If the farmers go to the mandi there is a cost , as they will have to give 2-3 kg per bag to the mandi operator as a fee ( called SUIT or ‘ free-of-cost supply ’),” says Baskar . Having an FPO offers a lot of other adv antages like meeting corporate dem and for bulk supply . In many cases , big corporations are known to pay an extra Rs 1-2 per kg as they get fresh produce without having to pay any mandi commission . Baskar claims that out of 60 FPOs under his care , as many as 35 have witnessed a three-fold growth in income for member farmers in three years .
Chaudhuri of the SFAC stresses that
FPOs are tedious to set up , taking up to three years , but many are showing good results .
aggregation , sorting and grading of produce is important for farmers to get a better price . This has been tried with impressive results in Delhi , where farmers are getting higher prices than they would get at Azadpur Mandi , and without the added hassle . “ We have 1,150 members from 14 villages in our FPO who have been divided into 20-member groups to work in coordination . We make the transportation arrangements , help with marketing , provide quality seeds , fertilisers and pesticides to farmers at concessional rates , give guidance on how to use fertilisers and pesticides , and undertake training of both farmers and labour on sorting , grading and packaging of produce ,” says Surat Singh Janghu , managing director of Krishak Bharti Producer Co Ltd in Delhi ’ s Bhakhtawarpur village . The four-year old FPO has applied for a Rs . 10 lakh equity grant from SFAC to expand operations , including bulk supply to corporate retail companies , and switch to organic farming . It is currently supplying a range of fresh vegetables to RWAs in three colonies . Besides Delhi villages , farmers from neighbouring regions in the NCR are also selling their produce through the FPO . Janghu reveals that bulk supply to corporate clients helps them save on packaging costs , whether for mushrooms or strawberry , and also on transport costs . “ Training and awareness programmes have greatly helped us to imp rove our turnover from Rs . 50 lakh in 2016-17 to around Rs . 1.5 crore this year ,” says Janghu .
Striving to make such organisations a viable business model , government agencies are trying to bring together FPOs and various aggregators like exporters , retail chains , etc ., which are bulk handlers with specific requirements for the type of produce they are seeking . Though early , the teething problems faced by growing FPOs are pushing up demand for infrastructure like warehousing and processing in rural areas , as better management practices take root . Some states like Tamil Nadu and West Bengal have also stepped in , with retail outlets operated by FPOs ensuring better prices for farmers and consumers . O
26 February 2018 OUTLOOK 59