Small and Marginal Farmers constitute 70 million households in India. The farmers face challenges of fragmented landholdings, low monthly household income (typically <Rs.6000 pm), lack of access to quality inputs (30% probability of seeds/pesticides being spurious/adulterated), and lack of access to credit. Farmers also gamble with the monsoon that if delayed leads to low yields and low income, and if on-time leads to high yields, price drops, and low income. It’s no surprise that these challenges lead to increased migration, aging farmers, an increased number of women-led farming households, and aspirational changes in the rural youth.
Farmer Producer Organizations (FPOs) are a powerful vehicle to provide better farm practices, collectivize input purchases, create market linkages, and realize better prices for the farmer. Although the government is interested in forming and supporting these FPOs, their well-intentioned efforts are ineffective – over 85% of 7374 registered FPOs are inactive.
Why are FPOs not working? Think of what an FPO is supposed to do. Engage with farmers (e.g., grow the farmer base, provide inputs, buy output, provide agricultural advice, get loans, insurance, etc. and work with the farming ecosystem (negotiate with input companies, attract buyers and get good prices, find lenders to get low cost loans, set up and manage post processing activities to increase the value for the farmers, …). How can a small FPO made up of 500 to 1000 farmers and run by a CEO (on a salary that an FPO can afford) manage all these activities? Imagine the CEO sitting in Barabanki, UP, getting Big Bazar interested in buying from the FPO and negotiating prices!
We at the Center for Rural Development, The/Nudge feel that there is an alternate model. The FPO should focus on farmer engagement and an FPO support unit (FPOSU) should help with the non-farmer activities. The FPOSU will work with 100s (maybe 1000s) of FPOs giving it the scale to get better discounts and prices, resources to have the management required, etc. This alternate model has the potential to transform the lives of tens of millions of small holder and marginal farmers. However, any such nascent model needs a concerted effort to evolve it and scale it. Just like Brij Mohan at SIDBI did with the Microfinance Industry or Dr. Verghese Kurien did with diary. We will support players who are already thinking along these lines, incubate new players, and bring in players who are in adjacent spaces. And we will help them in every way we can, from supporting expanding to new geographies and services, connecting with other players in the ecosystem, getting local players to do innovative pilots, providing seed funding to absorb some of the early stage risks, and solving problems as they arise. We are actively hiring for this team. See our careers page for more details. While this will sound audacious – come join us to create the next Amul++ model