100
S
tate
of
I
ndia
’
s
L
ivelihoods
R
eport
2015
Since most PCs do not have godowns or
warehouses to store, they are unable to hold
the produce and respond to enquiries from
bulk buyers. Moreover, producers want
cash immediately on harvest or production
and they do not want to delay market-
ing. Warehousing options are being tried
by some POPIs. Institutions like AKRSP
mention that creating infrastructure and
machinery can be done once business has
scaled up and initially the operations can
be through hired facilities.
POPIs also find that FPCs of small farm-
ers (holding 1 to three acres) has limitations;
they are averse to taking risks. There are
several growers’ federations especially of
export oriented cash crops or horticulture
crops in Maharashtra that are successful
because larger farmers are members and
small farmers benefit from the risk taking
ability and business acumen of the larger
farmers in doing business.
We are farmers; we are not business people.
Input supply and also collective marketing
business requires acumen and intelligence.
After two years of funding support we are now
on our own; we do not have staff. Board has
to manage the affairs of the company.
Source:
FPC, Rajasthan.
Overall, POPIs find that collective
marketing with grading, sorting and link-
ing with local markets and larger traders
(either individually or collectively) is easier
to manage for PCs than working on cor-
porate linkages or struggling with APMC
licenses. Individual producers benefit
from savings on transportation costs and
price difference due to grading and thus
are keen to deal through PCs. Bringing
transparency in dealings—weighment,
pricing etc.—with producers, has benefit-
ted the producers. POPIs mention that it
is difficult to follow all the laws and rules,
pay taxes and still pay the market price to
farmers.
Warehouse financing
Farmers, especially small and marginal,
normally do not get the benefit of the upside
in price for produce. They are almost always
forced to sell the produce soon after harvest
when the prices are at the lowest in order
to repay formal or informal debts and on
the preparation of the next crop. Delayed
marketing to ensure higher price realisation
for the farmers has been facilitated by a few
FPCs through warehouse receipt financing.
SRIJAN has promoted the women
farmer’s producer company, Samridhi
Mahila Crop Producer Company Ltd. which
is providing various services to its members
like agri-inputs, quality seeds, crop advisory
services andmarketing facilities. In 2013 the
PC did a pilot on warehouse receipt system
(WRS) to increase incomes of small-scale
farmers by enabling them to get better
prices for their produce and gain access to
get credit through a WRS.
Post-harvest, farmers have an option to
either sell the soya at a collection centre at
best price at that time (PC provides daily
prices to farmers every evening) or hold the
commodity in approved warehouses till they
realize a better price. The sale would hap-
pen through a partner spot exchange like
NCDEX or directly to an agri-corporate. In
case the farmer decides to store the com-
modity, finance is arranged from ICICI
Bank at reasonable rates of interest against
the security of produce. The presence of the
spot exchange and the corporate ensures
better price discovery for the farmer. When
the farmer decides to sell the produce sub-
sequently, the loan is liquidated and the
upside is available to the farmer as gain after
adjusting applicable costs.
During 2014–15, 78 farmers stored
1,286 quintals (average price was
`
3,317 at
the time of storage and
`
3,951 at the time
of sale). After meeting costs of storage and
interest costs, an average
`
300 per quintal
was the net gain frommarketing after storing
soya for six months. However, the women
farmers have to convince their family to store
