For 49-year-old K Kasiraj, who rears goats at Rasingapuram village in Theni district, getting bullied by middlemen at the town market while selling his goats, was a regular feature since childhood. The middlemen would demand a commission of Rs100 each from the buyer and the seller. “The price of the goat is determined by its weight. But, the middlemen would decide its weight by just looking at it. We couldn’t say anything,” says Kasiraj, recalling his helplessness. His plight is incidentally the story of almost every small and marginal farmer across India.
Not anymore. Along with 1000 other goat-herders from 10 neighbouring villages, Kasiraj in 2015 floated Theni District Goat Producer Company Ltd (TNiGPCL), a company that markets the goats of all its shareholders in bulk. Eliminating middlemen, the company directly supplies meat to customers, selling it at a rate cheaper than retailers and getting its constituent farmers a fair price for their produce.
In a silent revolution that has been fermenting in the farming sector since 2013-2014, many like Kasiraj are joining hands to form Farmers Producer Organisations (FPO) — corporate entities that are helping them eliminate middlemen and get a fair price for their produce. FPOs are farming start-ups which are being incubated by the Centre through Small Farmer Agri-business Consortium (SFAC), rural development bank NABARD, agriculture and horticulture departments of state governments and NGOs. There are around 200 such companies in Tamil Nadu.
“Farmers in nearby clusters who produce similar products like vegetables, paddy, coconut, milk and poultry, are bunched together as shared-owners in the company. By pooling their produce, they get a better bargaining price at the market compared to selling it individually,” says a senior agriculture department official. In the food economy, there is a huge gap between the price at which a farmer sells his produce and that at which the consumer buys it. The process benefits middlemen, while farmers struggle to pay off their loans. “This is why banks hesitate to give loans to small farmers. FPOs improve credit linkage as there is better credibility,” the official adds.
To form an FPO, every farmer has to pool in Rs1000 as paid-up capital while the incubating government agency sinks up to Rs10 lakh in the company. The agency nurtures every company for three years, providing salaries for an independent CEO and funds for training programmes and develops a business plan to build the company. After three years, the companies are out on their own.
Some FPOs have started marketing goods under their own brand name; a company of guava growers at Ayakudi in Dindigul district exports guava juice under its brand name. It is a staple drink offered at meetings in the Secretariat. In Madurai, a company by coconut farmers tied up with a college hostel to supply rice and coconuts; the students got it cheaper, while farmers earned Rs1 more per coconut.
Many agencies through several programmes provide farmers innovative learning mechanisms and rope in experts to ensure that their produce is of higher quality and resistant to diseases. Commonwealth of Learning, an intergovernmental body of Commonwealth countries, for instance sends out farming tips as voicemails to mobile phones of farmers.
Experts say such programmes help farmers improve their products and repay loans and also encourage banks to give loans to farmers who are part of learning modules. “We are trying to evaluate if banks can adopt learning modules as part of the credit policy to ensure prompt repayment of loans,” says Dr P Thamizholi, a consultant at COL. “Farmers are exploited by traders as they don’t understand the system of profits. Corporatisation eliminates these shortcomings,” says V Balaji, a consultant with COL who assists FPOs in drafting business plans.
Preparing concrete plans to scale up business — constructing warehouses, abattoirs and refrigeration units for perishable products — should be the way forward for these companies, says an official of NABARD. “Farmers need to tie up with bulk consumers like a residents’ welfare organisation or a gated community,” says the agri-department official.
DISCLAIMER : Views expressed above are the author’s own.