Producer Companies
95
members and thus played a critical role in
credit facilitation. Some PCs offer insurance
related to the livelihood (cattle insurance,
crop insurance etc.), usually in collabora-
tion with insurance companies. A few PCs
mentioned that they supplied inputs on
credit to the members but discontinued
the same on account of bad debts. Leasing
of machinery is also being undertaken in
some PCs. In Madhya Pradesh the apex PC
is arranging for leasing of high-quality farm
machinery and implements from EM3, a
private company, at negotiated rates to be
made available to the PC members.
In Access database, out of 65 PCs, 6 PCs
reported input supplies to their members,
and 9 PCs reported marketing of the
produce. Their average turnover is
`
19.30
million and if the data of two large PCs (one,
`
47.50million and the other
`
83.70million)
are left out, then the average comes down
to
`
6.10 million for a sample of 9 FPOs.
Turnover of
`
4.5 to
`
6 million has been
mentioned by three- to five-year old PCs
met during the field visits.
Most of the PCs work on multiple com-
modities; though there had been a thinking
that dealing with multiple commodities
will stretch the capacity of PCs especially
in forging market linkages, the model that
is evolving is that of dealing with three to
four commodities. Farmers rarely restrict
themselves to one crop. In any given geo-
graphical area, a significant proportion of
farmers grow more than one crop. A PC
focusing on just one crop will find it dif-
ficult to acquire members. A PC thus needs
to focus on a handful of major crops in
the area in order to gain a decent member
base. Moreover, FPCs dealing with a single
commodity can remain inactive for four to
six months in a year and the interest of the
board and farmers in the PC wanes. In areas
with changing cropping pattern the PCmight
find itself without business in some years as
members do not grow the concerned crop.
Moreover, many FPCs are in rainfed areas
where there is higher risk of crop failure and
have small farmers as members; the PC has
to work with the farmers on multiple crops
so that farmrisk ismanaged better.Moreover
lenders are also not comfortable with a single
commodity/crop approach. Some FPCs are
in niche crops, such as seed production; they
collaborate with State Seeds Corporation as
in the case of Rajasthan and District Poverty
Initiative Project (DPIP), MP.
Unique Selling Proposition (USP) of PC is to
work on production enhancement; neither
trader nor broker can do this.
Source:
POPI, Gujarat.
Figure 5.2:
Services offered by PCs
Inputs and
produce
marketing
Productivity
enhancement,
machine hiring
Producer
company
Financial
services
Source:
Authors.
