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FPO PROMOTION AND DEVELOPMENT PROCESS

Importance Of FPO'S

 Collectivization of producers, especially small and marginal farmers, into producer organisations has emerged as one of the most effective pathways to address the many challenges of agriculture but most importantly, improved access to investments, technology and inputs and markets. Department of Agriculture and Cooperation, Ministry of Agriculture, Govt. of India has identified farmer producer organisation registered under the special provisions of the Companies Act, 1956 as the most appropriate institutional form around which to mobilize farmers and build their capacity to collectively leverage their production and marketing strength. especially producer companies and link them to benefits under various programs and schemes. 

 Stage One: Pre-project Implementation (Three months) Baseline on volume, value & market access, centrality analysis, (i) Identification of Product specific clusters (ii) Feasibility Analysis -break-even  Estimates (iii) Project Implementation Plan procurement, inputs, storage

and marketing,

Stage Two: Enhancing Capacity & Implementation of Surplus Farm Production Plan (Mobilization Phase) (i) Village meetings- identify potential farmers, identify opinion leaders (ii) Identification of potential farmers for FIG & FPOs, LRP/ BF/LF Identification (iii) Hand holding support for Productivity Increase, IPM/ INM/ IPP

(iv) Identifying Value-proposition for setting FPO (logic of collectivization) (v) Exposure Visit of Farmers/opinion leaders.

Stage Three: Pre-formation Stage of FPO/Collective and preparation of FPOs business plan through FIG level exercise (i) Demonstration conducted on improved agriculture

practices (ii) Start up shareholders campaign (iii) Identification of training needs & imparting training to promoters and farmers of FPO (iv) FIGs meeting & orientation

started for FPO scoping, vision building exercise & exposure visit of promoters farmers (v) Generate crop-wise household information with surplus, deficit and gap exists (vi) FPO forming process initiated.

Stage Four: FPO formation Stage (i) Identification of FPO

promoters by FIGs (ii) Initiation of statutory process required for formation of FPO

like attainment of PAN, DIN of Directors etc (iii) Stabilize New Surplus Production System & Farmers in 2nd Crop Cycle (iv) Finalizing list of FIG members willing to join FPOs and start share money collection (v) Membership drive continues and framing of Bye-laws/MoA /AoA, incorporation of FPO (vi) Training of FIG members promoters on FPOs

Stage Five: (FPO establishment stage) (i) Physical establishment of FPO (ii) CB inputs need assessment (iii) Strengthening FPO –providing services for system development (Operating System, MIS, HR), (iv) Business Planning Exercise Market Linkages for Produce (v) Interface with buyers/marketers (vi) Increasing FPO’s equity though matching grants from SFAC.

Stage Six: (i) Implementation of business plan of FPO.



FPO SERVICE MODEL

 The FPO will offer a variety of services to its members as illustrated in the table. It can be noted that it is providing almost end-to-end services to its members, covering almost all aspects of cultivation (from inputs, technical services to processing and marketing). The FPO will facilitate linkages between farmers, processors, traders, and retailers to coordinate supply and demand and to access key business development services such as market information, input supplies, and transport services. Based on the emerging needs, the FPO will keep on adding new services from time to time. The set of services include Financial, Business and Welfare services. An indicative list of services includes: Financial Services: The FPO will provide loans for crops, purchase of tractors, pump sets, construction of wells, laying of pipelines. Input Supply Services: The FPO will provide low cost and quality inputs to member farmers. It will supply fertilizers, pesticides, seeds, sprayers, pumpsets, accessories, pipelines. Procurement and Packaging Services: The FPO will procure agriculture produce from its member farmers; will do the storage, value addition and packaging. Marketing Services: The FPO will do the direct marketing after procurement of agricultural produce. This will enable members to save in terms of time, transaction costs, weighment losses, distress sales, price fluctuations, transportation, quality maintenance etc. Insurance Services: The FPO will provide various insurance like Crop Insurance, Electric Motors Insurance and Life Insurance. Technical Services: FPO will promote best practices of farming, maintain marketing information system, diversifying and raising levels of knowledge and skills in agricultural production and post-harvest processing that adds value to products other business services accessible to rural producers; facilitating linkages with financial institutions, building linkages of producers, processors, traders and consumers, facilitating linkages with government programmes.

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PROJECT OUTCOMES

ECONOMIC IMPACT

  1. Per hectare production improved by 10% by end of project period
  2. Increase in net return to farmer (Inflation+10%)
  3. Increase in sub-sector development for agriculture
  4. Gap in availability of inputs reduced by 20-25%
  5. Increased food and nutritional security
  6. Market linkage for the backward and forward integration will be 

                 ensured with competitive market.

             7. Additional employment generated due to increased intensity of farming

             8. Benchmark minimum wage rate for labour

             9. Reduction in migration




SOCIAL IMPACT

1.  Social capital built in the form of FPOs

2. Improved gender relations and decision making

of women farmers enhanced in FIG & FPOs – by giving them board member positions

3. Institutional viability

4. Increased bargaining power for input purchase and output marketing

5. Reduced social conflicts and risks and enhanced welfare at the household level

6. Improved food and nutritional values

7. Leadership role of producers in technology

absorption

8. Positive health and nutrition impact on

consumers

9.  Environment- carbon credit.

BUSINESS PLAN : AN INTRODUCTION


 Introduction

• To highlight resource needs and the means to procure them

• To demonstrate the viability of the business proposition and the potential to repay credit realised

• To study and anticipate risks.

Coverage of a Business Plan

• What is to be produced/offered, how and when?

• How much is the investment required?

• Where will investment come from?

• Where could loans be sourced from? Are the necessary conditions/requirements for loan realisable? Can loans (if any) be comfortably serviced?

• Can a business survive fluctuations in any of the key parameters?

• What is the payback period on investment?

Content structure 

A Business Plan must include the following

• Project Profile/Snapshot 

Promoter/Entrepreneur Profile

Director’s qualification, training and experience relevant to the project

• Details of the Proposed Project

Requirement of project cost and working capital and means of finance

• Market Potential

Brief on potential customers, competition, and marketing strategy

• Manufacturing Process

Description of the manufacturing process, plant capacity, expansion plans, quality control procedures, etc.

• Income statement

Plant capacity, capacity utilisation, quantity produced/sold, and sales realization

• Expenditure statement

Cost of raw materials, utilities, manpower, repairs and maintenance, selling and distribution expenses, administra- tive expenses, interest on loans availed, depreciation and any other expenses

• Profitability Projections

Sales, cost of manufacturing, tax liabilities, repayments, retained profit/loss

A business plan may be as rigorous as an entrepreneur wants. The greater the rigour, the greater the potential for suc- cessful expansion and growth.

Note: Yet, the entrepreneur always needs to keep in mind that however lucrative and profitable a business plan may

look it is based upon certain assumptions which may vary during practical implementation of project.


The Sustainable Development Goals (SDGs)

Role Of FPO.

   Aiming at strengthening sustainable agriculture based livelihoods for farmers FPO creates small farmers and producer groups as a primary step. Secondly, producer groups are directly linked to market aggregators enabling integration of the pulses value chain and bringing agriculture products directly to consumers through them

The major components of the project include


1)Conduct baseline studies;

2) Build and nurture farmers’ groups at the primary and apex level,

3)Plan and implement agriculture based livelihood initiatives, especially aimed at productivity

enhancement,

4) Form and develop Producer Company/Producer Association/Cooperative for market linkage

and obtain extension and knowledge services and

5)Link producer groups to marketing opportunities by market aggregators.


The key activities undertaken are 

* Mobilization of farmers into producer collectives (FIGs, FPOs). The standard structure

envisaged is multiple Farmer Interest Groups (FIG) of between 20-25 members each at the

village level.

*Conduct Training, Exposure and several Capacity Building interventions for the FPOs and LRPs,

*Facilitate Agriculture based livelihood interventions such as trial and demonstration of Good

Agriculture Practices through implementing farmers Field Schools (replacement of varieties,

pre-and post-sowing practices, seed production and dissemination, INM, IPM, etc,

* Formation and development of Farmer Producer Company or other institutional form, which will

include awareness building, federating, drafting constitution, registration of the company,

develop and establish system and procedures related to administration, accounts, HR,

development of business plan and implementation, statutory compliance, etc.

* Facilitate building partnerships /collaborations with market aggregators for developing proper market linkages.

  

This dashboard presents SDG India Index 2018 analytics.
The Sustainable Development Goals (SDGs)
This dashboard presents SDG India Index 2018 analytics. The Sustainable Development Goals (SDGs)