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
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.
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.
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
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
8. Positive health and nutrition impact on
9. Environment- carbon credit.
• 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.
• 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?
A Business Plan must include the following
• Promoter/Entrepreneur Profile
Director’s qualification, training and experience relevant to the project
Requirement of project cost and working capital and means of finance
Brief on potential customers, competition, and marketing strategy
Description of the manufacturing process, plant capacity, expansion plans, quality control procedures, etc.
Plant capacity, capacity utilisation, quantity produced/sold, and sales realization
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
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.
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
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
*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.
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