96
S
tate
of
I
ndia
’
s
L
ivelihoods
R
eport
2015
Input supply
Most of the FPCs commence their business
with inputs supply including skills and tech-
nical services on crop/animal husbandry and
health care. Dairy PCs are also arranging for
quality cattle feed, fodder demonstrations,
veterinary support etc. Quality inputs deliv-
ered on time at the doorstep keeps farmers
bound to the PC as otherwise they have to
deal with issues of spurious quality, high
prices etc. FPCs bring economies of bulk
purchases and the assurance of quality in
inputs like fertiliser, seeds and chemicals.
FPCs in many states are involved in input
supply. Lack of credit is one issue which is
constraining input supply business.
Producer companies are able to arrange
the supply of seeds and fertilisers of
established brands and required quality.
A number of challenges are faced by FPOs
in this business. (a) First and foremost is that
getting necessary licences from agriculture
department to stock and sell inputs have not
been easy. The private traders whose busi-
ness is under threat and who have influence
over state departments prevent the issue of
necessary permits and licences to PCs. (b)
The next level of issues have been from the
members who find it difficult to break the
traditional ties with traders where inputs
are bought on credit. The traders also have
a variety of seeds, pesticides and fertilisers
to choose from. Facing funds constraints,
the FPCs demand cash from members
before purchase, they have limited prod-
ucts because of limited tie-ups with dealers
etc., (c) FPCs are also unable to match the
traders’ tactics; to get inputs at reasonable
rates, tie-up with dealers are done for a fixed
price three months in advance. Seed/input
marketing companies ask PCs to observe
retail prices. However, traders indulge in
unfair practices of selling below the fixed
price of the dealer. They are even willing
to incur losses in the short term in order to
wean away members from FPCs and hurt
the FPCs business. While members become
disgruntled with high prices of FPC, the
trader makes profits in other products he
sells. FPC thus has to face several issues in
input supply business. State apexes of PCs
are taking up these issues at higher levels.
Aga Khan Rural Support Programme is
forming a FPC of farmers to promote drip
irrigation. Since 2011 the NGO has been
promoting drip irrigation and finds that a
farmer is able to irrigate upto three acres
of land under drip irrigation with the same
quantity of water which was earlier used in
1 acre of flood irrigation. The NGO avails
the benefit of the Government of Gujarat
scheme implemented by Gujarat Green
Revolution Company (GGRC), wherein
GGRC has tied upwith suppliers for installa-
tion and after sales service. For one hectare,
GGRC provides
`
20,000 as subsidy, farmer
own contribution is
`
7,500 and AKRSP pro-
vides a loan of
`
17,500 to the farmer, which
has to be repaid to their PC. GGRC transfers
these funds to the supplier and also moni-
tors their functioning. AKRSP’s funds are
grants to PC and loans to farmers, and this
revolving fund is later used to increase the
area under drip irrigation and also used for
working capital in the PC for inputs supply.
Very few FPCs are managing agri-service
centers offering comprehensive solutions
to the farmers in crop management includ-
ing soil testing, inputs supply, leasing of
machinery, other common facilities such
as moisture meter, weighing, stitching
machines etc. Sincemodern agriculture needs
to be run as a business, where technology and
good agronomic practices play a key role,
FPCs need to evolve into competent provid-
ers of productivity and marketing solutions.
Marketing of output
Getting a fair price for their produce is the
key need of small producers. Among FPCs,
vegetable growers are seen as more progres-
sive in market dealings and are also more
used to price fluctuation. Farmers raising
single crops in rainfed conditions are not
seen to bemarket savvy. POPIs mention that
the capacity of the PC boards to understand
themarket dynamics thus plays a crucial role
in their readiness to take up this business.
