Catalysing Partnerships with Private Sector in Strengthening Producer Companies- organised by NAFPO in partnership with IIM- Ahmedabad

About the Meeting

Agriculture provides livelihood to the largest number of rural households in India. According to the Report of the Committee on “Doubling on Farmer's Income", the present agrarian distress is not materialised in low productivity but rather it is defined by the abysmal income received by the small and marginal farmers for their produce. This is the result of the rising cost of cultivation and the lack of viable market linkages to sell the produce at a competitive price. To precisely address these problems, mobilising farmers into Farmer Producer Companies/Organisations has been identified as the most preferred institutional mechanism for farmer prosperity by Govt of India and other development agencies. The recent budget announcement of forming 10,000 FPOs in the next five years across the country and the 5-year tax break are steps in this direction. There is a paradigm shift in the orientation towards agriculture from food security to fostering agriculture as a viable and profitable enterprise for the farmers through mobilizing them into collectives such as FPOs. So far, there are 5400 registered and active FPCs, promoted by SFAC, NABARD, State Governments, and other development agencies across the country.

The track record of these producer companies as sustainable, independent enterprises is limited. So while we continue to support the emergence of these organisations, new institutional innovations are required in search of sustained market access for farmers. Dynamic new markets, far-reaching technological and institutional innovations, rising aspiration of farming families characterize a fast changing agriculture landscape. The emerging new agriculture is led by a new breed of private entrepreneurs (unlike the traditional merchant capital with short-term view) in extensive value chains linking producers to consumers, the new private sector is attempting to bring market to smallholders. Meaningful assured arrangements of private enterprise in supply chain with producer/collectives (formal or otherwise) can open new spaces for long-term market integration.

Assured markets are a big pull for small & medium farmers to collectivise and aggregate their produce. However, this has been the weakest link whenever farmer collectives have attempted to do this themselves. The strength of SMF is her mastery over production system – as efficient producers of quality goods, partnership with private enterprise can unlock this potential at farm end. Innovative linkages and interventions have been made to support FPCs pertaining to key needs like access to markets, finance and technology. Some of these efforts include NCDEX (electronic commodity exchange platform), Samunnati (credit financing according to value chains to FPOs), Kamatan (direct procurement from FPOs) and CropIn (technology based solutions) that have broken the traditional norms of trade and have seized the opportunity that collectivization and aggregation of produce presents. Multi-national companies like Walmart are also investing significantly for the sustainability of FPOs by facilitating access to agricultural technology, training on sustainable farming methods, enhanced access to formal markets, and skill and capacity building of FPOs.

In this backdrop, a fishbowl roundtable meeting is organised jointly by NAFPO & IIMAhmedabad at the Food and Agriculture Conclave (Krishi Manthan) on 29th December 2019, to bring together FPOs and private players in the agricultural sector to deliberate various ways in which private players could invest in strengthening the ecosystem for FPOs which could be beneficial to both parties in the long term.

The participants of the consultation will include experts and practitioners from market access, financial access and technology covering agri-preneurs, financial institutions, regulators, logistics and warehousing service providers and farmer producer organisations.