`Farmer producer companies have mobilised farmers'

THE RECENT budget announcement of waiving tax for Farmer Producer Companies (fpcs) which make less than `100 crore as profit has fulfilled a long-standing demand from these emerging institutions. There are around 800 fpcs that have been formed in India since the legislative change in the Companies Act, passed by the Parliament in 2002. They have spread through the Small Farmers Agribusiness Consortium through its large-scale pilot programme in 2011-12 and nabard’s produce fund.

Providing an environment to farmers to better cope with the market and derive a larger share of consumer rupee is a longer term direction that is possibly more sustainable than one-off loan waivers. Through the fpc movement in recent years, there has been a significant impetus in mobilising farmers across the country, with fpos being seen as the institutional mechanism by donor organisations like the World Bank or International Fund for Agricultural Development for agricultural projects in several states. Today, fpcs are present in most parts of the country and have largely been more inclusive than cooperatives, with small, marginal and women farmers having more voice and representation.

However, despite a groundswell of support for fpcs from diverse stakeholders, they are facing challenges right from inception to acceleration. There have been roundtable discussions to address these challenges, especially about access to capital and markets. These talks have underlined the need to increase awareness among corporations, banks, investors, and players in the supply chain on the requirements of the sector. Examples include an advocacy called the National Association of Farmer Producer Organisations constituted to enable the continued growth of fpos to fulfil the aspirations of farmers and increase their incomes through collective action. Another is an upcoming think-tank led by Friends of Women World Banking has had a wider consultation at Delhi that has been more focused on finance and credit rating of fpcs. The writer is a professor at the Institute of Rural

Management Anand

POINT-COUNTERPOINT C SHAMBU PRASAD