Approach towards Capacity-building of FPOs on Fast Track Mode: In Punjab

Abstract

The focus of the paper is on exploring avenues for increasing value accruals to farmers. Basically, in the context of producers, the needfor evolution of Farmer Producer Organisations (FPOs) to reduce the exploitation by middle-men traders is apparent. The interventions being undertaken under the aegis of FPOs in different value chains and locations intervene on both forward and backward segments of the chain. Basically, the objectives of the producer companies are to: undertake various activities such as bulk purchase of inputs and delivery to farmer members; marketing of produce, grading and quality control and first level processing; procurement and maintenance of farm equipment for hiring out among farmers. The case illustrations considered in this paper present the setting in well performing FPOs offering a wide mix ofservices and earning high annual revenues as well as upcoming producer networks just graduating into providing a range of services. The benefits being accrued to member farmers range from considerable cost saving in sourcing inputs like seeds and fertilisers as well as larger net value accruals through marketing directly to end-consumers or national or global retailers. In essence, the paper validates the intervention approach of focus on FPOs as a means to provide various scale economies to small and marginal farmer stake-holders. It also reflects the option offinancing the capacity building and establishment of common facilities by such networks that agglomerate produce by means of matching grants in PPP mode. Further, it validates the need for a business development service providing platform, namely an Agri Business Promotion Facility, to provide a range of services including: the evolution of producer networks; facilitating management and technical training of such networks; providing guidance on the preparation of bankable business plans; linking networks with technology and equipment and credit related service providers; channelling links with apt markets and marketers; andproviding a range of other capacity building and networking services to consortia of farmers or FPOs to enable them to move up the value chain, eliminate rent seeking middle-men even while adding value to produce. Such interventions alone will enable the relatively deprived sections ofthe Punjab economy to integrate with the mainstream.