WHY farmers Producers organization is required

Why farmers Producers organization

1. Farmer Producer Organization (FPO) Dr. AJAZ AHMAD GANIE SCIENTIST, ANIMAL SCIENCE KVK PULWAMA

2. Constraints of a marginal farmer Small holding size Lack of timely support Seasonal Producer Weak organizational capacity Lack of access to credit Inadequate market access Presence of middle men Small Marketable Surplus Lack of knowledge Lack of access to inputs Improper warehouse Lack of value addition Inadequate transport Lack of ability to diversify ISSUES

3. Possible Solution to these problems Aggregation of farmers through a PO

4. Why farmers Producers organization? Decreased cost of production : Inputs in bulk at wholesale rates Price fluctuation can be managed; if there are practices like contract farming, agreements, etc. Better economies of scale : attracts traders to collect produce at farm gate Bulk transport reduces marketing cost Access to modern technologies, facilitation of capacity building, extension and training Post-harvest losses can be minimized through value addition Regular supply of produce and quality control Easy in communication for dissemination of information about price, volume and other farming related advisories Access to financial resources, without collaterals Easy access of funds and other support services by agencies Improved bargaining power Legal entity

5. How to form an FPO ? 1. Identification of the area 2. Identification of farmers 3.Meetings with farmers to discuss about FPO 4.Forming small dairy farmers interest groups

6. Formation of an FPO 5.Collection of Share capital 6.Selecting members for FPO Board 7.Meeting of selected members to become directors of FPO board 8.Finalizing Board of Directors & getting registered

7. POPIs A Producer Organization Promoting Institution (POPI) is a legal entity/institution that supports the formation and nurturing of PO. Cluster identification. The primary responsibility of the POPI is to provide continuous handholding support till the FPO acquires technical and managerial capability to run the business successfully Diagnostic and feasibility studies, including value chain analysis. Capacity building of PO management/ producers and organizing exposure visits. Business planning & Resources mobilization. Developing robust systems and procedures in PO development. Facilitating business decisions/ Operations, audit and compliances. The POPI could be any Non-Governmental Organizations, Trusts, Cooperatives, CSR Wings, NABARD promoted Subsidiaries, KVKs, Farmer Producers Companies, Farmer Federations, Commodity Boards, Co-operative Milk Unions and other experienced institutions meeting the eligibility criteria.

8. Registration of PO

9. Farmers/clubs SHG/JLG Groups PACs Identification of Natural Cluster Awareness Social Mobilization Exposure visits Identifying markets Farmers Constitution of Board Preparation of Legal Documents Registration Appointment of CEO FPO formation Digital Signature of Nominated Directors Apply for Name Availability Articles of Association Form No. 18 Form No. 32 Apply online for DIN Form-1 Power of attorney FPC formation Evolution of PO

10. Services provided by FPO

11. Guidelines for FPO formation FPO in plains: Farmer-members( cohesively located same interest) mobilized to form group of 15-20 Members(FIG/SHG/Farmers Club/JLG) Minimum farmer-members’ size of 300 North-Eastern and Hilly areas* (including UTs) : Minimum farmer-members required size of 100 Hilly area means area at a height of 1000 metre or above MSL

12. Who provides support to FPO They supports FPO financially and technically for the promotion and handholding of FPO. NABARD

13. Support to FPOs through NABARD Producers Organization Development Fund (PODF) Recognizing the strength of POs, NABARD created a dedicated fund “Producers, Organization Development Fund (PODF) to support FPOs OFPO An Off-Farm Producer Organization (OFPO) is a legal entity formed by primary producers who are involved in off-farm activities such as handlooms, handicrafts, artisan products, agro processing, etc.

14. PODF In addition, grant support is also made available for business incubation services, skill building, documentation of successful models, ICT application in business management, etc.

15. Sr. No Eligible Activity for Support Maximum amount of assistance per FPO ( Rs. lakh ) Year 1 Year 2 Year 3 Total I Formation and establishment A Registration 0.40 0.40 B Salary expenses of CEO 1.80 1.80 1.44 5.04 C Business Plan preparation 0.20 0.20 Sub Total (I) 2.40 1.80 1.44 5.64 II Training and capacity building A Mobilizing of Farmers (New FPOs) 0.15 0.15 0.30 B Training to FPO Directors- 2 prog . in first 2 years & 1 after 3rd year 0.75 0.75 0.375 1.875 C Training to CEO of FPO- 2 prog. in first 2 years 1 after 3rd year 0.25 0.25 0.125 0.625 D Incentive to POPI 1.00 1.00 1.00 3.00 Sub Total (II) 2.15 2.15 1.50 5.80 G Total (I+II) 4.55 3.95 2.94 11.44 Grant Assistance for Business Development to the tune of ₹5 lac ( to be sanctioned separately ) RO may sanction the project to POPI initially for a period of 3 years and conditional sanction may be extended for another two years, subject to fulfilling prescribed criteria Grant Support for promotion and nurturing of New FPO (Regular/Normal FPOs )

16. Eligibility Criteria of FPOs to receive Equity Grant Minimum 50% shareholders are small , marginal & landless tenant farmers Maximum shareholding by any one member shall not be more than 10% of total equity of FPO Minimum one Women member in Board of directors/Governing body Has business plan & budget for next 18 months

17. Capacity Building Skill development - to enable members produce goods in farm & non-farm sectors. Business planning. Technological extension through classroom training. Exposure visits. Agri . Univ., KVK, ATMA, KVIC, NGO tie-ups. Meetings with experts. Any other capacity building initiative which directly benefits the P.O.

18. Market Linkages Supply Chain Interventions. Fostering Input Suppliers Tie-ups. PO Sales Interventions. Explore tie ups with buyers for POs produce. Assistance for forming partnerships with local/large companies. Setting up marketing infrastructure facilities for sale of produce Explore possibility of creation of infrastructure.

19. OFPO OFPOs play an important role in promoting rural enterprises and generate local employment through value addition, design innovation and development, processing, brand-building, mechanization and development of technology plus strong forward and backward linkages.

20. OFPO Category No of members Max Assistance (₹Lakh) Intensive Major OFPO 200 to 500 125.00 Mega OFPO More than 500 185.00

21. Grant in aid extended by NABARD Activity Major OFPO Unit Cost Maximum Cost Compensation for OFPO ₹20,000/- pm 7.20 Travel Expenses ₹5,000/- pm 1.80 OFPO Office Expenses ₹5,000/- pm 1.80 Compensation of Office Assistant ₹10,000/- pm 3.60 Accounts ( CA, CS) ₹75,000/- PY 2.25 OFPO Office Software ₹50,000/- 0.50 OFPO Office Hardware ₹50,000/- 0.50 Sub-Total 17.65 Compensation of OFPO Facilitator ₹15,000/- pm 5.40 Travel Expenses of OFPO Facilitator ₹5,000/- pm 1.80 Sub-Total 7.20 Training and Capacity Building 25.00 Revolving Fund Assistance/ Working Capital Support 7.00 Infrastructure, CFC, Equipment, Tools 35.00 Marketing 30.00 Contingency 3.00 Total 124.85

22. Scheme of Implementation

23. Outcome Sustainable business plan Better farmer remuneration Low input costs A aggregation of produce Risk security Better marketing platform …………. Happy farmers!!

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