Pushkar, in Rajasthan, is a popular tourist destination. It is also known for its roses. Some 700 hectares in the region are dedicated for rose cultivation. The flowers are mostly exported.
Though Pushkar gives the highest per-hectare yield of roses in the country, the farmers' earnings were limited because of the highly fragmented land holding in the area. In 2015, Nand Kishor Saini decided to fix it. He brought together all the rose farmers in the region and set up a farmer-producer organisation (FPO), Pushkar Rural Agricultural Youth and Employment Producer Company (PRAYE). It started with 260 shareholders, and now has 500 shareholders and 350 unregistered members. The company has facilities where the produce is processed into value-added products like gulkand (a sweet preserve of rose petals), rose water, rose syrup and dehydrated rose petals. These products are sold under the brand Pushkarwala.
PRAYE collects 500-600kg pink roses a day. “Before the formation of the company, an individual rose farmer got Rs50 a kilogram for the crop. Now, he gets more than Rs65,” said Saini. Last financial year, PRAYE's revenue topped Rs1 crore.
The synergy helps in every aspect―from fetching better yield to extracting higher price for the produce, as Anita Malge, who runs Yashaswini Agro Producer Company in Solapur, Maharashtra, affirms. “We started with a small group of 10 people,” she said. “We collectively bought seeds and agri chemical, and started cultivating together.” Started in 2015, the company's goal is improving the lives of women farmers in the district. Today, it has more than 1,400 women shareholders from 32 villages.
Yashaswini focuses on millets and pulses, and sources them from farmers and then converts them into food products like biscuits and cookies, and sells them. “We have 55 products now, and our revenue was close to Rs8.27 crore in 2022-23,” said Malge.
Indian agriculture has for long been constrained by fragmented land holdings. According to the National Bank for Agriculture and Rural Development (NABARD), some 85 per cent of the land holdings belong to small and marginal farmers. The use of latest farm machinery is limited in small land parcels and, more importantly, these unorganised farmers are unable to get good value for their limited produce. They are also at the mercy of the vagaries of nature.
That is where FPOs like Yashaswini and PRAYE can make a difference. They are owned by farmers and the profits are shared among the shareholders. Each FPO has an elected board of directors. NABARD, government departments, banks and international aid agencies provide financial and technical support to these companies.
FPOs eliminate many layers of exploitation. Typically, local collection agents collect a farmer's produce for a commission. Then brokers sell it to a trader and the trader eventually sells it to institutional buyers. There is commission at every step and the farmer ends up getting very low price for his produce. And, he has limited say in negotiations.
FPO model changes all this. An FPO procures inputs, provides market information to the members, helps them get access to finance and typically has storage and processing facilities. FPOs also help in brand building, packaging and marketing the produce to large buyers.
Empowering women: Anita Malge (sixth from left), who runs Yashaswini Agro Producer Company in Solapur, Maharashtra.
Sahyadri Farmer Producer Company, based in Nashik, in Maharashtra, is a good example for how collective strength can reap huge benefits for farmers. Famous for its grapes, Nashik, over the years, has emerged as the wine capital of India. In 2011, four smalltime farmers led by Vilas Shinde came together and formed Sahyadri. Today, it services more than 18,000 registered farmers covering 31,000 acres and nine crops. Its turnover in the 2022-23 financial year was Rs1,007 crore, including Rs352 crore from exports.
The core crops that Sahyadri focuses on are grapes, tomato, pomegranate, oranges, sweet lime and sweet corn. The company has also launched processed food products like tomato ketchup, puree, frozen fruit pulp and frozen vegetables. It is the largest exporter of grapes from India. “We are striving to replicate the nation's commendable global presence in the dairy sector in horticulture,” said Shinde. “There is ample opportunity for collaboration within the agriculture sector, driven by unwavering commitment and a clear direction.”
According to the ministry of agriculture and farmers welfare, there are more than 7,000 FPOs registered through agencies like NABARD and Small Farmers' Agribusiness Consortium (SFAC). In 2021, the government launched a scheme called 'Formation and Promotion of 10,000 FPOs' with the budgetary provision of Rs6,865 crore. Under the scheme, FPOs are provided financial assistance up to Rs18 lakh for a period of three years. Provision has been made for matching equity grant up to Rs 2,000 a farmer with a limit of Rs15 lakh per FPO and a credit guarantee facility up to Rs2 crore per FPO from an eligible lending institution.
In May 2023, the ministry of cooperation decided to set up 1,100 new FPOs in the cooperative sector. Under this scheme, 033 lakh is being given to each FPO and 025 lakh per FPO to cluster-based business organisations.
P. Chandra Shekara, director general of the National Institute of Agricultural Extension Management, said the challenge was how the small holders could be brought together to bring in economies of scale. “The farmer is confined to production,” he said. “Much of the profit is not in production, but in processing and marketing, where farmers play a minimum role.”
The farm sector in India is a tale of two sides. While farmer producer companies like Sahyadri, Yashaswini and PRAYE have shown that working together can have huge benefits, hundreds of farmers kill themselves every year unable to pay off their debts. Creating more FPOs might help them collectively cultivate a better future.