Indian economy is globally identified as an agrarian economy. Agriculture is called the backbone of our economy as it supports the livelihood of more than 50% of the nation’s population. But the farmers, especially the small land holding farmers, struggle to make ends meet on a day-to-day basis due to various issues at both the national and local level. Ironically though, farming is deemed to be economically profitable, but being a farmer is not.
Of late, there has been considerable shift in agriculture from “Subsistence farming” to “Market Led” approach. i.e. “Agri – Culture” to Agri – Business”. Thus, collectivization and resource pooling has been the norm for sustainable agribusiness options. Farmers Producer Organizations (FPOs) have been identified as engines of change in agribusiness. In order to address the challenges faced by the farmers in making agriculture a profitable business, FPOs are being promoted with handholding support from the Government.
FPOs are agribusiness companies (registered under Companies Act 2013) promoted by farmers and primary producers as shareholders. This helps in collectivization of their inputs and resources thereby enabling them to access technology, inputs, credit as well as market thereby realizing the economic benefits from agriculture.
The core purpose of this division is to focus on formation, nurturing and strengthening of the FPOs as a profitable and sustainable business model through the application of scientific management principles such as branding, marketing, setting up a supply chain, operations management, financial management, value addition, processing, market linkage, digitization etc. NAF is increasingly focusing on equipping the FPOs and considers these collectives as a strategic tool to achieve the government’s vision of doubling the farmers’ income by 2022.
Broadly promotion of agribusiness and FPOs are done by - building rural entrepreneurship; linking SMF to integrated agri value chains; promoting agri enterprises and facilitating forward and backward linkages through credit linkages, produce aggregation, value addition and marketing linkage/tie ups NAF has been empanelled as a Resource Institution (RI) by Small Farmer Agri Business Consortium (SFAC), Ministry of Agriculture, and Government of India as well as by NABARD as Producer Organization Promoting Institute (PoPI) for promotion of Farmer Producer Organizations (FPOs) in Tamil Nadu. Apart from the above, NAF has also been empanelled by SFAC, NABARD, NCDC and NAFED as Cluster Based Business Organization (CBBO) for promotion of FPOs under Central Sector Scheme for promotion of 10000 FPOs in Tamilnadu, Andhra Pradesh, Uttar Pradesh and Maharashtra. NAF has been promoting FPOs with support from Small Farmer Agribusiness Consortium (SFAC), Central & State Government, NABARD and World Bank.
As part of agribusiness activities, NAF has been promoting Farmers Producer Organizations (FPOs) with support from the Small Farmer Agribusiness Consortium (SFAC), GoI / GoTN and NABARD. Four FPOs were promoted with support from SFAC in the first phase in April 2015. The project was successfully completed by July 2018 for three FPOs and the remaining FPO was completed by March 2019.
NAF has promoted 10 FPOs with support from NABARD between 2015 and 2018. Out of 10 FPOs, 8 FPOs are fully functional with varied business operations. Support extended to FPOs is as follows:
Based on the performance of the FPOs which were allotted to NAF, TNSFAC allotted 23 more FPO’s in first phase (18Nos in 2019 and 5Nos in 2020 under Collective Farming project. This was a project promoted by Department of Agri Business and Marketing, Government of Tamilnadu with an aim to form commodity groups and federating them as a FPO. Out of 23 FPOs, 21 FPOs are fully functional with varied business operations like input centre, seed farm, produce aggregation etc
TNSFAC allotted 9 new FPOs for second phase during 2019-20 of which all have been incorporated during lockdown and share amount collection process has been completed across all the FPOs. Out of 9 FPOs, 7 FPOs are fully functional with varied business operations like input centre; cattle feed business, selling of rice bag, oil trading, and grocery shop etc
TNSFAC allotted 23 FPOs for third phase during 2020-21, and the incorporation for all FPOs has been completed. Share money collection and business activity decision is under various stages of progress across the 23 FPOs
Women producers, who are often excluded or have their participation restrained in organizations, face additional challenges such as cultural and legal discrimination that prevent them from accessing productive assets, finance, education and technology. Establishing their own organizations or becoming more active in integrated organizations can help them overcome these constraints, increase their economic and social status and improve access to needed services. With this background, Women Farmer Producer Organization was formed in Kurinjipadi, Cuddalore District with only women farmers as shareholders. This is the first Women Farmer Producer Organization in the state of Tamil Nadu. This project was launched on 17th June 2019 at Kurinjipadi. This project is being supported by M/s Blue Star Ltd, a leading Cold Storage Company through arrangements with CII.
This World Bank assisted project has been implemented predominantly in river basin areas of Tamilnadu wherein modernization of irrigated agriculture, promotion of water saving technologies etc were focused. As a part of sustainability of IAMWARM project, the Government is focusing on community strengthening and business development through promotion of Commodity Groups and federating them as FPOs. NAF has been selected as Technical Support Agency by TNSFAC for providing handholding support to FPOs (formation, training and capacity building of FPOs on Governance, statutory compliances, business promotion and supply chain management activities) for these FPOs. NAF is extending technical support to 20 FPOs in 15 districts of Tamil Nadu state in the first year and 26 FPOS in 19 districts from second year onwards.
NAF has won a bid for another World Bank assisted project viz., Tamilnadu Rural Transformation Project (TNRTP) as Technical Support Agency for extending support to Producer Collectives that have been formed by Tamilnadu Corporation for Development of Women Ltd (TNCDW), Ministry of Rural Development, GoTN. Under this project, both on-farm sector and off-farm sector enterprises promoted under SHG programs are being upgraded to FPOs. NAF has won the contract for Region II covering 5 districts including Salem, Erode, Tiruppur, Coimbatore and Nilgiris.
NAF in collaboration with the Center for Digital Financial Inclusion (CDFI) and Flexicode Technologies Limited is implementing a project KANCHI (). Under this, several modules are being worked upon like the Farmer Data Repository (FDR), Farmer Investor Services (FIS), Milk Aggregation Portal (MAP) and Lending and Recovery System (LRS), Input Center Digitization (ICD), Farm Lease, PA & WHS, were developed.
i. MAP Enhancement: MAPhas been upgraded to suit the requirement of milk aggregators of AAVIN, wherein automatic milk analyzer and weighing machines are used. The enhanced system will capture data directly from the milk analyzer and facilitates aggregators to generate payment advice.
Over the last one year from April 2019 till March 2020, a total of 23,05,113 lakh liters of milk data has been procured through our KANCHI MAP portal in Kanchipuram district, and recorded a transaction history of 7.25 Crores of payment to the aggregators through cashless mode.
ii. Input Center Digitization (ICD)) In order to capture the business operations of input centers run by FPOs, ICD module has been devised and has been rolled out. This creates a stock management and invoicing system. This will also facilitate cashless payment system through integrated machine liked with Apna Pay. We have transacted an amount of 1.22 Crore using Apna Pay in the first year.
A total of 78.38 Lakh rupees have been transacted through KANCHI’s ICD platform during the past year from April 2019 to March 2020.
iii. Farm Lease Module: Similar to ola and uber taxi services which are successful as aggregator models, KANCHI has developed an additional module, namely the ` Farm Lease’ wherein the farmers’ requirement of farm machineries like tractors and implements, harvesters etc., can be booked through mobile with payment made possible through mobile banking. This is in the pilot stage of field testing.
iv. Produce Aggregation (PA), Warehousing system (WHS), e-Commerce (KANCHI KART) and Revenue and Expenses Management (REM) modules are in place in order to facilitate digital transactions of FPOs, These modules will help track the businesses as well as smoothen the business processes besides facilitating compliances for FPOs in the long run. All these modules are in the development stage wherein ERD (Entity-Relationship Diagram) has been completed and prototypes are being generated along with user stories
Under Digitization scaling up efforts of FPOs project with support from BNY Mellon, NAF has initiated this with 5 SFAC FPOs namely Jarugumalai FPCL, High Hill Tea FPCL, Resahe FPCL, and Ponneri FPCL. All the farmers FDR data has been incorporated onto the online portal and FIS has been generated in KANCHI, in which Share Allotment has been done and Share Certificates have been generated and distributed. These 5 FPOs have started using the platform in FIS for 4700 Famers. Business transactions on input supply and produce aggregation are being recorded for 4 FPOs.