Agriculture currently employs more than 50% of the Indian population and contributes towards 20% of the country's GDP. While large farmers in various parts of the country find ways to maximize profits while maximizing output, small-holding farmers are struggling to make ends meet in the face of rising wheat demand and rising fuel and fertilizer prices.
Consequently, a Chennai-based Agri-tech and value chain enabler is assisting small-holding farmers across India in forming farmer-producer organizations (FPO) and increasing the quantity and quality of their produce.
Why Did India Start Having FPO’s?
Every Farmer Producer Organization has farmers as its members. These organizations provide end-to-end support to small-holding farmers as well as technical services, marketing, processing, and other aspects of cultivation inputs. The idea behind the initiative is that farmers who produce essential foodgrains can organise into groups and register themselves under the Indian Companies Act.
The objective of FPOs is to help improve competitiveness and expand opportunities in emerging markets. In general, FPOs' goals can be divided into three categories: farmers' need for capital, markets, and technology.
While attempting to achieve the three objectives, smallholder farmers face a number of challenges. Pravesh Sharma, the Director of Samunnati Agro, said, "If a farmer has a small land holding, his or her market bargaining power is limited. Institutions are hesitant to lend money to small farmers because they do not believe the farm will be profitable. On the contrary, the viability of a large farmer is never in doubt.”
FPOs first appeared nearly two decades ago, as a response to farmers' growing needs. To date, a total of 4465 new FPOs produce clusters have been allocated to Implementing Agencies for the formation of FPOs, out of which a total of 632 FPOs have been registered.
Objective of the organisation:
Samunnati began with the intention of addressing the concerns of small-scale farmers. FPOs provide a massive window of opportunity into the small-holder agriculture ecosystem, which accounts for 87% of total production. Samunnati has helped over 3000 FPOs through market connections, lending capital, and technology solutions, among other things.
Tulsa Prajapati, the Chairperson of Damoh Mahila Kisan Private Company Limited, told The Logical Indian that she began working with Samunnati almost six months ago. She stated, "We have seen a tremendous increase in sales since we changed the way we operate. During the lockdown, the company held farmer meetings to help them understand the concept of FPO ". Damoh FPO had over 310 shareholders as of June of last year.
Since the company's representatives went from pillar to post spreading the message and benefits of joining the FPO, the women were always eager to join Samunnati. However, one of the biggest challenges they faced while convincing small-holding farmers was to make the initial investment of Rs 1,000. Wheat was the first crop we sold during the lockdown.
Impact created by Samunnati:
Samunnati collaborates with resource institutions in each state, which could be local civil society organizations that work directly with FPOs. As a result of its affiliation with such resource institutions, Samunnati gains visibility among local FPOs. The women's FPO was promoted by the Madhya Bharat Consortium of FPOs. At the state level, the consortium of over 150 FPOs has promoted 15 all-women FPOs.
Samunnati initially lent the women farmers 5 lakhs, which helped them significantly increase their annual turnover to more than 1 crore. Apart from wheat, farmers in Madhya Pradesh grow soybean, moong, urad, masoor, and chana dal.
Women farmers receive 1% of all transactions made while working with the company. The women can sell produce worth Rs 50 lakhs on average. Furthermore, at least one transaction occurs every two days. When asked about their future plans, Prajapati responded, "We only want our company to thrive. We are excited to make our mark in the Mandi and open warehouses. In addition, we intend to increase the number of shareholders from 310 to 450 ". Furthermore, she emphasized that only women are stakeholders.
Samunnati makes every effort to ensure that the business operates smoothly. It does not, however, supply inputs directly, but rather connect FPOs to suppliers and finances transactions. Since 2016, the company has worked with FPOs and has assisted over 3,000 FPOs. Furthermore, the company is the only formal lender that makes loans to farmers with any collateral.
Samunnati is looking to get associated with FPOs as partners rather than clients. According to Pravesh Sharma, "FPOs are the long-term solution to value addition and sustainability. Furthermore, the company plans to enter climate-smart agriculture through technology-enabled interventions and collaborative partnerships with international organizations. Seed varieties and some of the cultural practices related to crops must evolve with the changing times. We want to be able to assist women with market access and technological services while also assisting them in adapting to long-term climate change.”
