Owning your Farmers...

In a country like India, there are about 126 million small and marginal farmers with less than two hectares of land. These farmers account for 86.2 per cent of all farmers in the country but own just 47.3 per cent of the crop area. So, one will have to see the impact of the new system, ‘One Nation One Market’, will have on these farmers.

Let us revisit the post-liberalisation era. Many reforms like the Model APMC Act 2003, signing of an agreement on agriculture of WTO, the model agriculture produce and livestock marketing (APLM) Act 2017, the Model Contract farming act 2018, an online platform connecting the market places like eNAM were undertaken. Most of these reforms guided the future course of action for the APMCs and the private sector participation in agricultural marketing and food processing. One of the provisions in the Model APLM Act, 2017 is the promotion of direct interface between farmers and processors/ exporters/ bulkbuyers/ end users. This was to bring down costs which advantaged both the producers and the consumers. There are numerous successful examples of direct farmers markets all over India such as Sant Savla Mali Shetkari Bazaar in Maharashtra, Apni Mandi in Punjab, Rythu Bazar in Andhra Pradesh etc. Despite such measures, small or medium farmers have little or no say in the market. In such a situation, collective farmers’ marketing organisations like cooperatives and Farmer Producer Companies (FPCs) have an important role to play in increasing the bargaining power and reducing the input costs of the small and marginal farmers.

Even though a new ordinance has acknowledged the role of farmers cooperatives and FPCs, in the future central government may come up with separate guidelines for these organisations

The cooperative sector in India is well developed and across the country, there are more than eight lakh cooperatives with membership spanning more than 270 million people. These cooperatives are more concentrated in the western states like Maharashtra and Gujarat, which have a substantial share in the agricultural lending, fertiliser production, rural warehousing and sugar production. Maharashtra alone has more than two lakh cooperatives.

FPCs, which are seen as a hybrid between cooperative societies and private limited companies, have gained momentum in the present decade after their promotion by the government of India. FPCs cannot completely substitute the cooperatives but serve complimentary to the cooperative societies particularly in functional areas which are not catered by the primary agricultural credit societies (PACS) like marketing and processing of agricultural produce.

Price realisation can only be achieved after the strategic strengthening of the distribution and the supply chain network for agricultural produce. In the fresh food segment, consumers are predominantly linked through small grocers and street hawkers. Retailers selling branded products which are directly sourced from the farmers are largely absent with few notable exceptions like SAFAL (a subsidiary of Mother dairy) and few start-ups.

As organised retail is growing on the online space for agricultural produce, many enterprises are marketing fruits, vegetables, dairy products and others from online platforms. During COVID-19 times, this is quite successful. For this, FPCs are emerging to be effective.

According to the report on doubling farmers' income, the concept of the Primary Rural Agriculture Market (PRAMs) may be useful for doubling incomes. PRAMs can provide services like direct marketing between producers and consumers and also serve as aggregation platforms for small farmers.

In our pilot project, Maharashtra Cooperatives Development Corporation (MCDC) extended this concept and connected ‘Farmers Marketing Organisations' in the form of a company or a cooperative directly to the end consumers in urban areas residing in the cooperative housing societies. MCDCs project connected around 78 FPCs to around 430 housing societies in cities like Mumbai, Pune and Thane. These societies catered to the needs of more than 11,000 families residing in these societies. This resulted in better price discovery for farmers. But at the same time, there were issues.

The most important learnings from this pilot were the need to boost the facilities for cleaning, grading and good storage at farm gates itself which could result in lesser wastages for small farmers.

So, the way forward in this era of free farm trade and commerce is to focus on capacity building. This is possible by building back end infrastructure and promoting collective farmers organisations like FPCs and cooperatives. This will ensure that small and marginal farmers will not be left behind in the liberalised agricultural marketing regime.