Centre may promote Farmer Producer Organisations, but will they address agrarian distress? -Richa Govil
India already has several kinds of FPOs. So why have they not made a dent on farmers' woes?
On July 5, 2019, the government of India announced its intent to promote 10,000 farmer producer organisations (FPOs) over the next five years, as part of its efforts to increase farmer income and reduce agrarian distress.
Such collectivisation can be very powerful. The best known example of an FPO is that of Amul (Gujarat Cooperative Milk Marketing Federation Ltd.) which is a dairy cooperative with over three million producer members.
Seventeen years ago, the government of India introduced a new form of the ‘producer organisation’, namely farmer producer companies, which combine cooperative principles with professionalised business management. The largest such company, Sri Vijaya Visakha Milk Producers Company Limited, has over 100,000 members, who have together contributed more than Rs 200 crore to fund its operations.
Currently, India has thousands of different types of FPOs, including co-operatives, farmer societies and farmer producer companies, which focus on various sectoral activities such as cultivation, dairying, livelihoods related to non-timber forest produce (NTFP), fisheries, and so on. To this, the government is keen to add another 10,000 in the next five years.
The idea of FPOs is appealing because it is predicated on the belief that if hundreds of small and marginal farmers can collectivise, they can pool their resources (i.e. capital) together to undertake processing and trading of agricultural commodities more effectively, leading to an increase in income and ultimately a reduction in distress and vulnerability.
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