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LATEST NEWS UPDATES | Tackling India's structural vulnerability in agriculture -Sushma Vasudevan and Aparna Bijapurkar

Tackling India's structural vulnerability in agriculture -Sushma Vasudevan and Aparna Bijapurkar

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published Published on Aug 3, 2021   modified Modified on Aug 4, 2021

-The Hindu Business Line

A sustainable collectivisation of agri produce and marketing, through Farmer Producer Organisations, will help the highly fragmented agriculture sector realise its full revenue potential.

It is widely known that India’s agriculture sector has a challenge of lack of scale. Around 80 per cent of our farmers are small and marginal, with less than two hectares of land. Farmer Producer Organisations (FPOs) have been posed for years as the solution to this scale problem, enabling small farmers to act as a large farm unit. They can collectively bargain for better prices on both inputs and outputs, pool together to buy machinery, transport crops and, thereby realise economies of scale. To this end, the government has even announced the formation of 10,000 new FPOs by 2023-24 with budgetary provision of 6,865 crore. A win-win solution for all?

Unfortunately, despite the seemingly perfect solution and significant will, FPOs have been far from a silver bullet. As per a study by SFAC, there are around 5,000 FPOs in the country, with almost half of them in development stages of mobilisation and business planning. About 30 per cent of these are operating viably, while some 20 per cent are still struggling to survive. So why, despite the collective wisdom, have we failed to stand up 1000s or even 100s of successful FPOs?

There are a few challenges limiting the potential of FPOs today, and here are three ideas to transform this.

Upgrade the quality of talent

Running a successful FPO requires a set of market-facing and organisation skills. On the market-side, FPOs need to manage procurement, sales and marketing, supply chain and logistics, amongst others. Internally, the CEO of an FPO needs to manage 300-500 farmers, each of whom has an equal say in decision-making, and meet financial and legal requirements. To address this, it is important to evaluate the following:

A fellowship programme with certification and on-ground experience to support the need for upcoming 10,000 FPO CEOs and functional managers. The programme can be set up in partnership with multiple agriculture universities across the country. The curriculum can be structured over 3-4 years to include classroom training on business fundamentals, on-ground experience with CBBO/RI from Day 1 of mobilisation, practical experience on building market linkages, negotiation and investment planning.

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The Hindu Business Line, 3 August, 2021, https://www.thehindubusinessline.com/opinion/tackling-indias-structural-vulnerabilities-in-agriculture/article35701011.ece


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