Financing and supporting Producer Organisations

NABARD has taken an initiative for supporting producer organizations, adopting a flexible approach to meet the needs of producers. In order to give a special focus, the “Producers Organization Development Fund”(PODF) has been set up wef 01 April 2011, with an initial corpus of  50 crore . Any registered Producers Organization viz, Producers Company( as defined under Sec 581 A in part IXA of Company’s Act 1956), Producers Cooperatives, registered Farmer Federations, MACS (Mutually aided cooperative society), industrial cooperative societies, other registered federations, PACS, etc. set up by producers are eligible under the fund. Support under PODF is provided as under:

Credit Support is provided for financial intervention. Support in the form of grant, loans, or a combination of these is also available for capacity building & market interventions.

Since most of the Producers Organisations are having low capital base, scope for NABARD's intervention under PODF has been enhanced to support Producers Organisations for contribution to share capital.

  1. Introduction

    1. Indian producers are unable to realize optimal value from their produce and progress further due to fragmentation of land holdings and lack of organization. India has over 12.5 crore farmer households of which over 85% are small and marginal farmers with land holdings of less than 2 hectares. The average size of land holding is 1.33 hectare/ farmer household. Due to this fragmentation and disorganization, it is not economically viable for the farmers not only to adopt latest technology but also to use high yielding varieties of inputs like seeds and fertilizers. They are also unable to realize good value from their marketable surplus by individually selling their produce.

    2. On the other hand in case of non-farm sector activities,the handloom weavers & artisans are not able to compete with their products in the market due to poor quality & obsolete designs.

    3. Through better organization,producers can utilize scale to procure inputs at a lower price, and gain more selling power for their produce/product. Forming a producer organization can also provide access to timely and adequate finance, build capacity and provide linkages to markets.

    4. NABARD has, therefore, decided to set up a separate fund titled "Producers Organization Development Fund" (PODF) to tackle the issues of non availability of timely credit, capacity building of producers & strengthening of the Producers Organizations and market tie-ups. The Fund has been created in NABARD with an initial corpus of 50 crores from out of its operating surplus for the year 2010-11.


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