Linking smallholders
to the agri value chain
Imperatives for inclusive economic growth
Small Farmers’ Agribusiness Consortium
(Dept. of Agriculture and Cooperation)
Govt. of India
लघु कृषक कृषष व्यापार संघ
भारत सरकार, कृषष मंत्रालय
1
What ails smallholder agriculture
1. Investment deficit: less than 10% access
institutional credit; poor capital formation; no
avenues to leverage assets
2. Technology deficit: Irregular and unreliable
technical advice (19% depend on private input
dealers for advice; only 9% on govt. extension staff:
NSSO study 2005)
3. Input deficit: uncertain input supplies; huge
dependence on unregulated private markets for
water, labour etc.
4. Market deficit: Monopoly and monopsony market
conditions; opaque price discovery; poor marketing
infrastructure; lack of bargaining power
FPOs
Department of Agriculture and
Cooperation (DAC), Ministry of
Agriculture, Govt. of India will act as the
nodal agency for the development and
growth of FPOs.
3
Small Farmers’ Agribusiness Consortium (SFAC),
a Society under DAC, is the designated agency
of DAC to act as a single-window for technical
support, training needs, research and
knowledge management and to create linkages
to investments, technology and markets. SFAC
will provide all- round support to State
Governments, FPOs and other entities engaged
in promotion and development of FPOs. In
particular, SFAC will create sustainable linkages
between FPOs and inputs suppliers, technology
providers, extension and research agencies and
marketing and processing players, both in the
public and private sectors.
4
• The mandate of National Cooperative
Development Corporation (NCDC) will be
expanded to include FPOs in the list of
eligible institutions which receive
support under the various programmes
of the Corporation.
• NAFED will take steps to include FPOs in
the list of eligible institutions which act
on its behalf to undertake price support
purchase operations.
5
• DAC will work with Food Corporation of India
(FCI) and State Governments to encourage them
to include FPOs as procurement agencies under
the Minimum Support Price (MSP) procurement
operations for various crops.
• DAC and its designated agencies will work with
NABARD and other financial institutions to direct
short and medium term credit for working capital
and infrastructure investment needs of FPOs.
DAC will also work with all relevant stakeholders
to achieve 100% financial inclusion for members
of FPOs and link them to Kisan Credit Cards.
6
• DAC will work with Ministry of Corporate
Affairs and other stakeholders to further
clarify and strengthen provisions of the law
relating to the registration, management and
regulation of FPOs with a view to fostering fast
paced growth of FPOs.
7
How FPOs benefit small producers
1. Aggregating smallholders into FPOs proven pathway to
increase investment, improve bargaining power, move
up value chains and improve access to technology,
markets.
2. Aggregation only way to enable SMF to exploit
emerging opportunities domestic and global by
integrating with SMEs; retail chains
3. Climate change coping mechanisms and risk mitigation
requires aggregated platforms for efficient delivery
4. Aggregation will facilitate more effective targeting of
subsidies to farmers
8
SFAC FPO network structure
SFAC
Marketing linkage/inputs/credit
State level
Federation of KPCs
(Policy advocacy, explore
wider markets, strategic
partnerships)
(10000+ farmers)
Cluster level
KPC
(10-12 villages)
(1000 farmers/
(Credit, inputs, technology,
capacity building, marketing
linkages)
50 FIGs in each)
Village level
FIG
(Crop planning, seed
production, demonstration,
knowledge sharing,
aggregation)
(15-20 farmers in
each group)
Kisan Producer
Co/Coop
FIG
FIG
Farmer Producer Organisations (FPOs)
Typical range of services provided
Financial & technical
Input supply
(Seed, fertilizer, machinery)
(Credit, savings, insurance,
extension)
FPO
Marketing linkages
Training and Networking
(contract farming,
procurement under MSP)
(HRD, policy advocacy,
documentation)
Status of FPO Promotion
Target
No. of Farmers to
be mobilized
No. of FIGs
(15-20 farmers) to be
formed
No. of FPOs
(@1000/FPO) to be
formed
2.85 lakh
14000-19000
227
Achievement
No. of
Farmers
mobilized
No. of FIGs
(15-20 farmers)
formed
No. of FPOs
registered
No. of FPOs
under process
Registration
2.80 lakh
15000
147
80
STATE WISE STATUS OF FPO PROMOTION
Achievement
S.no
Name of State
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
Arunachal Pradesh
Andhra Pradesh
Assam
Bihar
Chhattisgarh
Delhi
Goa
Gujarat
Haryana
Jammu
Srinagar
Jharkhand
Karnataka
Kerala
Himachal Pradesh
Madhya Pradesh
Maharashtra
Manipur
Meghalaya
Mizoram
Nagaland
Odisha
Punjab
Rajasthan
Sikkim
Tamil Nadu
Tripura
Uttarakhand
Uttar Pradesh
West Bengal
TOTAL
No. of Farmers
No. of FIGs
FPO Registered
FPO registration
under process
1678
29395
6000
6606
6063
3520
1810
10461
5073
1500
600
10107
20001
3160
6000
34410
36917
1750
1750
700
1750
6001
6005
32215
1876
5940
1750
6004
23245
8322
280609
94
987
300
408
412
196
116
536
259
85
35
628
1094
158
72
1861
2065
84
140
35
139
301
343
1827
159
298
127
359
1209
641
14968
2
2
NA
7
4
4
0
5
5
1
0
5
4
NA
NA
33
29
2
2
0
1
2
7
12
0
NA
3
6
4
7
147
0
8
NA
0
2
0
2
6
3
0
1
1
11
NA
NA
6
5
0
0
1
1
4
1
13
2
NA
0
0
13
0
80
Direct marketing efforts by FPOs
Andhra
Pradesh
Retail selling through
mobile vans
Maharashtra
Rs. 7-8 lakh worth of vegetables are being
directly marketed daily to 30 housing
societies in Thane, Mulund and Kalyan,
resulting in saving of 1 to 1.25 lakh per day
(middle man charges)
Jharkhand
Collective marketing of produce
including cabbage, cauliflower,
tomato, beet root, gourd and
coriander etc.
Bihar
organic cultivation and
convergence with
Government schemes
Chhattisgarh
Not only promoted
women empowerment
but also helped attain
sustainable livelihood
Delhi
Established linkages
with Mother Dairy,
Reliance Fresh and
Bharti Walmart
Goa
State Horticulture
Corporation Ltd. procures
the vegetables from the
farmers’ groups on fixed rate
basis.
Gujarat
Collective Marketing
of vegetables
Haryana
Onion field
Karnataka
capsicum cultivation in
the protected
environment
Kerala
Roof Top Gardening
Punjab
Cultivation of Lettuce and Iceberg at
Farmers’ Field in Samrala, Ludhiana
Madhya
Pradesh
Market Linkage by
grading & packing
Odisha
Aggregation, distribution,
market linkage and retailing for
farmers- ICT led model by
private company
Sikkim
Established a unit for water
harvesting
KRISHIDOOT Project by SFAC & RML
18
FPOs in the XII Plan
•
•
•
•
XII Plan document endorses FPO mobilization
Policy framework to promote FPOs under RKVY
2014: Year of Farmer Producer Organisations
2014: UN Year of Family Farming
19
FPO focus of XII Plan
• Component for FPO promotion in all major CSS
• RKVY window opened for FPO promotion (MP: 100
FPOs; WB: 50 FPOs; Sikkim: 10 FPOs; UP: 50 FPOs;
Kerala: 30 FPOs)
• Equity Grant and Credit Guarantee Fund Scheme
• RBI included financing of FPOs upto Rs. 5.00 crores
under priority sector lending norms
• GBY: 33% subsidy to FPOs
• Venture Capital Scheme: minimum project size
reduced to Rs. 15.00 lakhs; poultry, dairy included
20
Building an ecosystem for
supporting FPOs
Challenges ahead
21
Retailers/Processors
MSP
Link to
Consultant
Banks
NSPOT/NCDEX
SFI/GVT HR Plan
Marketing
HRD
CSC
Banks
NBFCs
Inputs
BDS/ERP
WHR
Mechanization
Krishidoot
Credit
EGCGFS
Ecosystem
for
sustainable
FPO
Services
(Technical)
Infrastruc
ture
Retailing
PHI/VIUC
GBY
VCA
NMFP
RKVY/PPIAD
FPOs as sourcing point
for rural products
FPOs as rural retail
points for consumer
products/services
Thank You
23