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Farmers are forming companies to sell produce but with credit facilities and warehouses post-harvest, they hope to succeed big time
Guwahati: Amid reports of farmer protests elsewhere in India, there is a more benign revolution taking place here in the Northeast.
Recently, farmers in Biswanath were able to get advance payments to harvest potatoes and solar panels for their farms to cut electricity bills. Fishermen are relying on a stock of fingerlings while reservoirs are already made. They are all members of the Sootea Farmer Producer Company in Biswanath.
Farmer Producer Companies and Farmer Producer Organisations are the new rage in the seven sisters and eighth brother, thanks to the realisation for aggregation and marketing of agricultural produce. In fact, over eight percent of all farmer producer companies in India, are in the Northeast and considering the opportunities they offer FPOs are becoming a popular concept. FPO members could be producer companies, registered societies or any entity that could share profits among members.
“We have 512 members and 600 more waiting to be shareholders,” says director Rajibananda Gohain.
Gohain told Business North East that the two-year-old FPC is not impatient in booking profits yet. Instead, it is investing in funding the farmer-fishermen members and in capital like a planned hatchery that will soon come up.
On February 10, when an orientation programme on sustainable development goals was organised by North Eastern Regional Agricultural Marketing Corporation (NERAMAC), as many as 10 FPOs and six cluster-based business organisations attended. FPCs and FPOs are coming of age in Assam and rest of the Northeast.
In Arunachal Pradesh, young farmer and a non-profit worker Mungrei Phinao is helping set up the Miyo Miao Ekgaon FPC with over 200 farmers ready to be a company. “It will help them sell various products like paddy, ginger, turmeric or vegetables,” said Phinao who works with farmers in Changlang district.
That social enterprises like Ekgaon are getting involved are testimony to the rising interest in FPCs or FPOs. They are using existing informal mechanisms like farmers’ clubs to turn them into farmer interest group (FIGs) which form the backbone to run an FPC.
Farmers’ synergy
Managing Director of NERAMAC Commodore Rajiv Ashok (Retired) explained why FPOs are getting popular. “The north-eastern region is primarily an agrarian economy with a majority of households engaged in agriculture either directly or dependent on some branch of agriculture indirectly as a secondary source of income,” he told BNE.
Since land holdings are largely minor and spread out aggregation is a challenge. Limited produce due to traditional means employed further complicates the matter. “This necessitates aggressive aggregation and marketing of agri-produce,” said the NERAMAC MD.
Evidence suggests that aggregation is indeed happening, aided by such FPCs. In lower Assam’s Goalpara district, Kanaklata FPC is one among at least six FPCs in the district that focus on paddy, potatoes and jute.
Kanaklata FPC director, Rofiqul Islam a new generation farmer has learned from his father’s weaknesses owing to the latter’s lack of education. For Islam, the FPC is a panacea for farmers. “When we mobilize farmers, we are able to get a better bargaining power which is what is happening with paddy and is bound to happen with potatoes too,” Islam told BNE.
Not just that. When a phone call goes to the agriculture development officer it is acted upon and the government support system crackles to life. For fertilizers or insecticides, farmers are finding response times cut down miraculously.
Islam said FPCs are a mini-revolution, putting a smile on his FPC member’s face. The concept is something which even Prime Minister Modi had aimed at, he said.
“Look at the benefits: last year, potato crop failed in our Tarangpur area due to late blight but this year with the synergy of FPC and state government help, production has gone up by 60 percent because as FPC we could get insecticides on time,” says Islam.
Never before did lone farmers get the advantages they are getting today as part of FPCs, says Gohain.
Expanding footprint and problems
Of the 7476 FPOs in India, 608 are in the Northeast. Of these, 289 are in Assam, 69 in Manipur, 81 in Nagaland, 13 in Sikkim, 50 in Tripura, 106 in Arunachal Pradesh. There are no less than 123 FPCs in Assam alone, many of them highly motivated but mostly young.
The two-year-olds are as of now, comfortable as the three-year hand-holding by government is still on. Many feel that the real challenge will be after the three- year period.
Nandita Sharma of the resource institute Associated Tea and Agro Management Services (ATMS), is a social entrepreneur associated with at least four FPCs in Arunachal Pradesh. These FPCs have member-farmers growing ginger, turmeric and oranges. She felt that the start of the FPC movement in Northeast is good, but several challenges lie ahead.
Sharma has seen the problems with FPCs that were set up in 2018. The major issue is of credit or finance. Although initially there is help from the government on loans and advances, once the FPCs are on their own problems begin to surface in absence of back-up mechanisms.
“Those who have not paid Kisan Credit Card loans have spoilt their credit ratings and may not get loans, while most farmers in the Northeast do not have the capacity for providing collaterals,” says Sharma. After all, everything is becoming bank-linked necessitating a good credit rating for the FPCs.
Then there are post-harvest problems reported from more than one location. Islam of Kanaklata FPC felt that due to absence of cold storages in Goalpara, there is little chance for farmers to get good potato prices. “We could have got even Rs 20 per kg if we could keep the potatoes for a month or more – right now we aren’t able to sell even at Rs12 per kg,” says Islam.
Sharma said that the government will need to plug the post-harvest gaps and work out solutions for credit lines to the FPCs once they are independent in order to make more than the 1000-member groups sustainable. As of now the bigger these groups are, the greater the success will seem. Farmers say: let there not be failure ahead.
FPOs and FPCs
