Role of FPOs in Doubling Farmers’ Income The Nava Jyoti Community in Rayagada district

Group Constitution Chairperson:Smt. NeelkamakDarbari, Additional Chief Secretary (Agriculture), Govt. of Rajasthan Co-Chairperson : I. Shri M.C. Thakkar, CGM, NABARD II. Dr. Amar KJR Nayak, Professor, XIMB, Bhubaneswar Moderator : Shri. Bhaskar Pant, DGM, NABARD Participating States: Andhra Pradesh, Arunachal Pradesh, Assam, Chandigarh, Chhhatisgarh, Gujarat, Haryana, Himachal Pradesh, J&K, Jharkhand, Karnataka, Kerela, MP, Maharashtra, Manipur, Mizoram, Nagaland, Delhi, Odisha, Punjab, Rajasthan, TN Telangana, UP, Uttarakhand, West Bengal, Sikkim, Goa

Overall Context Experiences of the different states Various challenges of grounding & stabilizing FPOs Diversity of different context across the country FPO in the context of Marketing Ecosystem Facilitation (APLM Act 2017, Contract Farming, FPO Policy) Efforts towards Convergence, Coordination & Cooperation

Key Issues for Discussions What could be the optimal size in terms of no. of members & geographic spread of a primary level FPO? (Frequency of interactions among members, ease of transactions and volume of transactions/business) How can resources be converged at district level to facilitate and support to ground FPOs at the community/GP level? What are the key Challenges faced in forming and stabilizing FPOs in different states under different contexts? How should the primary level FPOs be registered? As cooperatives or as producer companies? (Registration Fees, Audit & Filing fees, cost of legal compliances, challenges to small farmers: Transaction costs) Shared the draft National Policy Guidelines on FPOs and suggestions sought from the participating states and delegates present.

What could be the optimal design in terms of no What could be the optimal design in terms of no. of members & geographic spread of a primary level FPO? Design Issues: No. of members of an FPO (size of landholdings, surpus generated, economies of scale, interactions, & fraternity) Geographic coverage of an FPO (urban, rural, topography in NE states) FPOs are evolving, different sizes exist as of today & provisions to be provided accordingly. In addition to individual producer/ farmers small producer groups, FIGs, CIGs, Farmers club and SHGs can be a member of a primary level FPO especially in larger GPs , NE and Hilly States. While member of a primary level FPOs may be from one GP in most states for better convergence; in NE & hilly states, members be from contiguous GP or contiguous districts as the case may be. Products and service mix to diversify risk & enhance returns A 3-tier Institutional architecture in a district Duration of handholding (5-7 years) ‘A’ class PACS may be restructed & upgraded to FPOs

How to meet the resource requirements of an FPO? Resources required for Critical Areas: Mobilization of producers/farmers Capacity building and handholding Need of trained Manpower to run the day-to-day operations of an FPO Registration expenses Basic infrastructures Working Capital Storage & Value addition Sales & Marketing

Support Mechanism Grant component up to Rs. 25 lakhs per primary level FPO Matching equity grant up to Rs. 10 lakhs per primary level FPO Support for setting up of common facility centres FPO on behalf of members shall be eligible to get subsidy on pro-rata basis Details to be provided in the Operation & Stabilization Fund Guideline of National FPO Policy. Convergence of different schemes/ programmes through FPOs States to modify relevant provisions (issue of procurement/ input licenses, etc..) for FPOs to avail. Based on performance of different agencies, nodal agencies for implementation and monitoring may be selected in different regions.

How should the primary level FPOs be registered? Cooperative Producer Company (as per Part I of Section IX A of Companies Act.) State may decide on either type but maintain consistency across a district. FPOs already registered under other legal forms may also be supported for a few years before they can be registerd as cooperative or producer company

How to ensure Sustainability? Build ownership & cooperative spirit of members through a systematic mobilization, training and convergence of resources Enable higher frequency of interactions among members by optimizing the cluster size of FPOs. FPOs to engage in multiple activities (inputs, product and services, etc..) to ensure regular incomes to members and increaserinteractions among members. Reduce Market transaction costs by optimising market distance; thereby increase net income to producers/farmers. Sufficient provisions for systematic social capital formation along with adequate support for financial capital formation. Convergence and Coordinationa among Ministries/Departments of Agriculture, Panchayati Raj and Rural Development (NRLM) Develop a Comprehensive & Flexible FPO Policy

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