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LATEST NEWS UPDATES | The future of farmer producer companies could be brightened -Vijay Avinandan, Manmeet Kaur and Anuradha Saigal,

The future of farmer producer companies could be brightened -Vijay Avinandan, Manmeet Kaur and Anuradha Saigal,

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published Published on Sep 27, 2022   modified Modified on Sep 28, 2022

-Livemint.com

Tackle deficiencies of capital mobilization, access to state provisions and women’s participation to boost FPCs across India.

In 2017, the Indian government reaffirmed its commitment to reduce rural distress among nearly 93 million farming households through efforts to double farmers’ income. What has been remarkable is the emergence of farmer producer companies (FPCs) as a viable way of supporting this approach.

The last two years have been tumultuous. Pro-market legislation introduced in 2020 was contested by farmers, leading to the eventual rollback of three laws. Covid increased the economic risk borne by farmers. After all, nearly 70% of farming households in India are small and marginal. An average farmer earns a little more than 10,000 per month (current prices) and nearly half of all farmers are estimated to be in debt. Most farms are rain-fed and exposed to climate risks. Small and marginal farmers operate with big disadvantages in terms of scale, diversification of crops, potential price risks and bargaining power.

FPCs, introduced in 2000, are a viable ‘new age’ option to address some of these challenges while maintaining India’s present welfare equilibrium. Operating on the long-standing welfare model of ‘collectivization’, FPCs function under the Companies Act of 2013, wherein shareholding farmers pool resources for better market linkages. But unlike older models, FPCs are meant to prioritize business and are assessed by the profits they earn.

A few months ago, during a farmers’ meeting in a distant village in Jharkhand, an attendee questioned the benefits of joining an FPC, since purchase prices offered by local mandi traders were the same as what FPC offered. A participating director of a local FPC replied that while FPCs may not appear lucrative in the short-term, they offer a chance to own a piece of business led by a professional team which constantly mentors its farmers on good cropping practices, creates market opportunities through e-commerce platforms and client networks, offers support for product branding and ensures transparency of profit distribution.

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Livemint.com, 27 September, 2022, https://www.livemint.com/opinion/online-views/the-future-of-farmer-producer-companies-could-be-brightened-11664296144959.html


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