Producer Companies
97
Some PCs only facilitate linkages with
the markets but do not procure from farmer
members andmarket themselves. Some have
initiated collectivemarketing of producewith
varied levels of success. SFAChas tied upwith
RML Information Services, formerly known
as ReutersMarket Light, to connect 380 FPOs
with dealers and buyers. A fewhavemanaged
to get agricultural producemarket committee
(APMC) licence to trade and have entered
into partnership with institutional buyers
to procure for them from the
mandis
for
which they earn a commission. Some POPIs
like Vrutti, find that trading in commodities
requires specialised skills and should not be
undertaken by FPOs.
State level apexes of PCs are develop-
ing their skills in forging market linkages.
Madhya Pradesh state apex PC mentions,
“We find the PCs are able to market the
produce of only 20 per cent to 25 per cent of
their members. Capacity and availability of
funds aremajor constraints.We identify buy-
ers, match the need of buyers with what the
farmers produce, workwithPCs in improving
quality since mismatch in quality is high and
also negotiate for better deals. Role specifica-
tion is important. Like Amul we want PCs to
market what they can at their level and come
to us where they need support; we don’t want
to force PCs tomarket only throughus. Brand
development is the key role of Apex.”
FPCs mention that marketing of farm
produce is not an issue but finding reliable
long-term buyers has been a challenge.
Marketing of seeds produced by the farmers
has not been smooth—where the seeds fail
to meet the quality parameters, farmers are
not paid and this affects not only the exist-
ing farmers but also hampers the enrolment
of more members. Dairy PCs have usually
tied up for marketing with larger dairies but
there have been issues in such market link-
ages forcing them to enter retail marketing.
(See Chapter 4 on dairy initiatives).
Some FPCs participated in SFAC’s
scheme of procurement under MSP last
year. Since the price offered by SFAC was
higher than the market rate, producers were
willing to wait even for three days near the
office of FPC to sell their produce. However,
this year though MSP was offered, since the
rate was less than the market price farmers
were not keen to sell. Access Livelihood
Consulting mentions that during 2013–14,
under MSP, FPCs in Telengana did business
worth
`
180 million and during 2014–15
sinceMSP was lower thanmarket rate, busi-
ness was substantially lower at
`
30 million.
PCs were linked with private sector compa-
nies like TATA, Mahindra and Mahindra
with working capital support from FWWB.
AFARM, in Maharashtra participated
in SFAC scheme of supplying vegetables
to urban centers in Pune by tying up with
housing colonies, hotels, malls, and the
initiative worked for three to four months.
Agency tie-up requires continuous supply
of adequate quantity at specified quality.
AFARMworked with growers in five villages
but found that crop planning for required
supply requires professionals to work with
them for a longer term. Short-term support
of even two cycles is not sufficient to sustain
supply under such tie-ups.
However, one key aspect that has to be
borne in mind is that farmers also borrow
from traders and money lenders for inputs.
These lenders have the first call on the
produce. Unless FPCs offer production
inputs, advise and extension services along
with credit, the traditional market linkages
may remain unbroken.
Corporate tie-ups
Some FPCs are also forging corporate tie-
ups. For vegetables and fruits marketing,
corporate tie-ups have been popular. The
other commodity is soya where companies
like ITC and Hindustan Lever have shown
FPCs with small farmers as members, limited
staff capacity and funds constraints have to
plan their business very carefully. While run-
ning the marketing business in PC, high level
of precaution is needed; if the farmer loses, he
will lose trust in the institution.
Source:
POPI, Gujarat.
