Dr Ashu Sharma
Agriculture has always been a lifeline and a significant contributor to the nation’s Gross Domestic Product and the Indian economy, providing livelihoods to millions of farmers. About 70% of the rural population depends on agriculture and related activities. The population increased 3.5 times from 350 million to 1.40 billion, hence the demand for food increased while total cultivable land decreased. Cereal area per person has been steadily declining for several decades, from 0.22 ha to 0.10 ha and is expected to be less than 0.06 ha per person in 2050. The big and alarming issue of food and income security has therefore been raised. In addition, marginal farmers and smallholders face a rapidly overflowing basket of challenges. Although they produce enough food, the production they get from the input is not worth satisfying mainly due to the lack of facilities such as market facilities i.e. i.e. transport, storage, processing, etc. technical staff support, dissemination of information. However, the high cost of production, low access to credit as well as weak market linkages also hinder growth. Rapid weathering and uncertainty such as scarcity of irrigation water, threat of wild animals, growing labor shortage between farms and inter-regional disparity, household income inequality and low productivity are the main witnesses of today’s agriculture. The problems have imposed critical implications on the farming community and as a result, every day more than 2,000 farmers are leaving agriculture and many more rural youth are migrating to cities for other professions.
One of the major joint initiatives of the National Democratic Alliance (NDA) government and Indian Prime Minister Narendra Modi under NITI Aayog also focuses on doubling farmers’ incomes. In this scenario, the solution is possible by exploring innovative market-oriented extension models to integrate farmers, especially smallholders; with the value chain so that the net income at the end of the farmers is remunerative enough to keep them in farming. Several institutional models have been tried in India to integrate farmers into production and the value chain like self-help groups, farmer interest groups and farmer cooperatives, etc. themselves as a collective, offers them a commercial vision of agriculture, connects them to the market and improves their own economic and social situation.
Strategies to increase income through agricultural producer organizations (FPOs)
Farmers’ organization of producers (FPO) is a formal or informal institution of collective action in which most of its members are those whose main source of income and livelihood is agriculture and related activities. The FPO provides services which are the main source of improved livelihoods, access to market information, inputs and advocacy. The FPO helps improve the socio-economic condition of farmers, build farmers’ capacity through better market access, and improve farmers’ orientation towards entrepreneurial activities. Government of India has declared 2014 as the “year of farmer organization” and these were introduced with the support of Ministry of Agriculture and Farmers Welfare and Research and wish to double the revenues by 2022 by covering 10,000 OPFs and providing a better life for those engaged in agriculture. The Government of India has launched a new core sector program “Training and Promoting 10,000 Farmer Producer Organizations (FPOs)” with a clear strategy and committed resources to train and promote 10,000 new FBOs in the country. FPOs should be developed in commodity clusters with emphasis on “One District, One Commodity” to promote specialization, better processing, marketing, branding, exporting to leverage and improve the market access for members.
Benefits of forming FPO
Service Provision: FPO provides various services to their farmers including capacity building by providing capacity building services, improving market access by providing better market linkages and increasing production by crop by providing better quality seeds and fertilizers, and their development by strengthening links with better institutions. .
Better incomes for farmers: Better services provided by the FPO contribute to improving the socio-economic condition of farmers by increasing net production and improving the production of farmers by providing better quality products. Purchasing inputs in bulk at a lower cost and selling them wholesale at a market would help farmers get better prices for produce and thus help improve farmers’ incomes.
Connecting farmers to market: Connecting farmers to markets is essential for improving the livelihoods of smallholders and beneficial for consumers. Smallholders are more efficient in production, but they are nevertheless at a serious disadvantage, mainly due to the marketing of their products. Farmer producer organizations have provided marketing linkages and enabled smallholder farmers to participate collectively and more effectively in marketing. They are in a better position to reduce transaction costs related to access to inputs and products, to obtain essential market information, to guarantee access to new technologies and to penetrate high value-added markets, which makes it possible to participate with large farmers and agro-industries.
Value Chain Addition: FPO has a better value chain addition processing unit. Adding value to products at the farmer level would help farmers do business with ease and retain better incomes through performance beyond the farm level. Adding value through branding, sorting and processing improves skills and knowledge and helps purchase products and provides reasonable prices to farmers, facilitating marketing options, reducing losses after harvest and a huge potential for job creation for the rural poor in general and for women in particular.
(The author is a scientist at KVK Kathua of SKUAST Jammu)