Linking smallholders to the agri value chain Imperatives for inclusive economic growth

1. Linking smallholders to the agri value chainImperatives for inclusive economic growth Small Farmers’ Agribusiness Consortium (Dept. of Agriculture and Cooperation) Govt. of India लघु कृषक कृषि व्यापार संघ भारत सरकार, कृषि मंत्रालय

2. What ails smallholder agriculture • Investment deficit: less than 10% access institutional credit; poor capital formation; no avenues to leverage assets • Technology deficit: Irregular and unreliable technical advice (19% depend on private input dealers for advice; only 9% on govt. extension staff: NSSO study 2005) • Input deficit: uncertain input supplies; huge dependence on unregulated private markets for water, labour etc. • Market deficit: Monopoly and monopsony market conditions; opaque price discovery; poor marketing infrastructure; lack of bargaining power

3. FPOs Department of Agriculture and Cooperation (DAC), Ministry of Agriculture, Govt. of India will act as the nodal agency for the development and growth of FPOs.

4. Small Farmers’ Agribusiness Consortium (SFAC), a Society under DAC, is the designated agency of DAC to act as a single-window for technical support, training needs, research and knowledge management and to create linkages to investments, technology and markets. SFAC will provide all- round support to State Governments, FPOs and other entities engaged in promotion and development of FPOs. In particular, SFAC will create sustainable linkages between FPOs and inputs suppliers, technology providers, extension and research agencies and marketing and processing players, both in the public and private sectors.

5. The mandate of National Cooperative Development Corporation (NCDC) will be expanded to include FPOs in the list of eligible institutions which receive support under the various programmes of the Corporation. • NAFED will take steps to include FPOs in the list of eligible institutions which act on its behalf to undertake price support purchase operations.

6. DAC will work with Food Corporation of India (FCI) and State Governments to encourage them to include FPOs as procurement agencies under the Minimum Support Price (MSP) procurement operations for various crops. • DAC and its designated agencies will work with NABARD and other financial institutions to direct short and medium term credit for working capital and infrastructure investment needs of FPOs. DAC will also work with all relevant stakeholders to achieve 100% financial inclusion for members of FPOs and link them to Kisan Credit Cards.

7. DAC will work with Ministry of Corporate Affairs and other stakeholders to further clarify and strengthen provisions of the law relating to the registration, management and regulation of FPOs with a view to fostering fast paced growth of FPOs.

8. How FPOs benefit small producers • Aggregating smallholders into FPOs proven pathway to increase investment, improve bargaining power, move up value chains and improve access to technology, markets. • Aggregation only way to enable SMF to exploit emerging opportunities domestic and global by integrating with SMEs; retail chains • Climate change coping mechanisms and risk mitigation requires aggregated platforms for efficient delivery • Aggregation will facilitate more effective targeting of subsidies to farmers

9. SFAC FPO network structure Marketing linkage/inputs/credit S F A C

10. Farmer Producer Organisations (FPOs) Typical range of services provided

11. Status of FPO Promotion Achievement

13. Direct marketing efforts by FPOs Andhra Pradesh Retail selling through mobile vans Maharashtra Rs. 7-8 lakh worth of vegetables are being directly marketed daily to 30 housing societies in Thane, Mulund and Kalyan, resulting in saving of 1 to 1.25 lakh per day (middle man charges) Jharkhand Collective marketing of produce including cabbage, cauliflower, tomato, beet root, gourd and coriander etc.

14. Bihar organic cultivation and convergence with Government schemes Chhattisgarh Not only promoted women empowerment but also helped attain sustainable livelihood Delhi Established linkages with Mother Dairy, Reliance Fresh and BhartiWalmart

15. Goa State Horticulture Corporation Ltd. procures the vegetables from the farmers’ groups on fixed rate basis. Gujarat Collective Marketing of vegetables Haryana Onion field

16. Karnataka capsicum cultivation in the protected environment Kerala Roof Top Gardening Punjab Cultivation of Lettuce and Iceberg at Farmers’ Field in Samrala, Ludhiana

17. Madhya Pradesh Market Linkage by grading & packing Odisha Aggregation, distribution, market linkage and retailing for farmers- ICT led model by private company Sikkim Established a unit for water harvesting

18. KRISHIDOOT Project by SFAC & RML

19. FPOs in the XII Plan • XII Plan document endorses FPO mobilization • Policy framework to promote FPOs under RKVY • 2014: Year of Farmer Producer Organisations • 2014: UN Year of Family Farming

20. FPO focus of XII Plan • Component for FPO promotion in all major CSS • RKVY window opened for FPO promotion (MP: 100 FPOs; WB: 50 FPOs; Sikkim: 10 FPOs; UP: 50 FPOs; Kerala: 30 FPOs) • Equity Grant and Credit Guarantee Fund Scheme • RBI included financing of FPOs upto Rs. 5.00 crores under priority sector lending norms • GBY: 33% subsidy to FPOs • Venture Capital Scheme: minimum project size reduced to Rs. 15.00 lakhs; poultry, dairy included

21. Building an ecosystem for supporting FPOs Challenges ahead

23. Thank You