Project closures bring a lot of uncertainty for the FPO being promoted. Continuous stakeholder engagement with cooperative input suppliers, Krishi Vigyan Kendras and the Mandi by Prakriti Foundation has helped create a buy-in for the three-year-old Diwak Mata Farmer Producer Company’s ideals and vision.
The RACP project: bringing civil society, government and private consultancy together
In 2012 the World Bank funded an ambitious program, the Rajasthan Agricultural Competitiveness Project (RACP) involving six departments of the state government collaborating with each other to make interventions related to watershed management, water resource management, horticultural, sustainable agriculture and animal husbandry. Dr. Pritpal Kalra, the Project Coordinator of RACP, reflected that much of the early years were spent in establishing mechanisms to get six departments, headed by different principal secretaries to work under the same roof given their own departmental norms. Grant Thornton was roped in 2015 as a specialized agency to promote agribusiness through the project. FPOs were sought to be established by implementing agencies or NGOs across the state. The Prakriti Foundation, an NGO with expertise on watershed and participatory irrigation management, in the region of Rajasthan-Gujarat state borders was called upon to implement the project in the catchment area of the Jakham dam in Pratapgarh district.
Building Diwak Mata: getting the right people on the ground
The Diwak Mata Farmer Producer Company Limited (DMFPCL) was promoted by Prakriti and after initial social mobilization was registered on June13, 2018. Diwak Mata has 525 members including over 100 women, who together have contributed Rs. 6,27,100 as share capital (in 2019-20). The turnover of DMFPCL, in its two years of operation, has risen to Rs. 32,11,138 with Rs. 2,42,213 as the net profit.
Rajendra Jaiswal, the Executive Director of Prakriti Foundation, explained that the intensive mobilisation phase included repeated meetings with farmers and convincing them to collectivise to form Multitask Groups (MTGs) in 35 villages of the catchment area of the Jakham dam. Farukh, the field representative of Prakriti, mentions how farmers were skeptical to join any groups or contribute equity as they were wary of chit fund scams! Numerous evening meetings led to a total of 219 MTGs that were federated as five Multitask Associations (MTAs). From each of these, two representatives were chosen to form the Board of Directors that included two women, one of whom is a graduate. The chairman Ambalal had prior experience of engaging with farmers through working with the Foundation of Ecological Security (FES) in the region.
Selecting a good CEO is critical for FPO’s success. Rakesh Sain, from a farming family, following his graduation in agriculture was working for a seed company in Jaipur. When Farukh identified him as a potential CEO and spoke to him he was initially hesitant. After several meetings with Rakesh and his father, Farukh finally convinced him about the opportunity to make a difference to farmers in his district. Rakesh has helped build and grow the business of the FPO.
Diwak Mata began with input business selling seeds, pesticides and fertilisers to farmers. The Department of Agriculture facilitated the FPC enter the input business despite resistance from input companies and local traders. Smart tie-ups by the FPC with IFFCO Bazaar benefitted the farmers through cost savings, with Diwak Mata making profits through a small margin and increasing sales. Entering the output market, including facilitating sales at the Mandi has not been easy even with a mandi license. Rakesh helped broker a deal with Sarvodaya Agrotech Ltd, a local buyer, for 10MT of soybean but the charges levied by the buyer did not work for Diwak Mata. Grading the produce with some processing could give their produce an edge and better returns too.
Greater availability of irrigation water and inputs has led to soyabean replacing maize as the preferred crop in Kharif in the region. Despite the high volatility of Soybean prices in the market, farmers are reluctant to move away from soybean as it continues to be seen as a low maintenance crop.
Building assets and creating the ecosystem
In July 2019, as provisioned in RACP, DMFPCL purchased land in the Semlop village from one of its members to establish a Farmer Common Service Centre (FCSC) that currently houses an office, a 60MT storage area for input stocks, a shop front for input sales and a sorting and grading unit with a capacity of processing 1MT/hour. Due to interventions of the Department of Agriculture and others, DMFPCL has been able to get a license to sell inputs from IFFCO Bazaar. Mukesh Ameta, the manager at the Pratapgarh branch of IFFCO Bazaar has been very supportive. He feels that FPOs, like DMFPCL has a role to play in not only selling inputs to the farmers but also in disseminating information about their optimum usage. DMFPCL also has good links with Krishi Vigyan Kendra (KVK), Pratapgarh, where the resident scientist, Dr. Yogesh Kanojia was willing to help the FPO and its farmer members with seed production trials. Good seed production can mean quality seeds in the market and business for the FPO too. At the local mandi, the APMC secretary Madan Gujjar is supportive of the DMFPCL to market member produce through APMC. However, he feels that to be a regular at the mandi, the FPC needs to motivate and facilitate the members to take upgrading and sorting of their produce.
Man proposes virus disposes: an opportunity to start anew!
Covid has impacted the operations and plans of DMFPCL. Since the lockdown, the input shop has not been functional continuously and the sorting unit has only been tested. The FPC is now looking forward to reviving its input shop by placing a salesperson and motivate the members to bring their produce for sorting and grading at the FCSC, before being sold at the mandi or elsewhere. This will give better returns to the member farmers will get for their produce even as the business of the FPC improves. Prakriti Foundation has been instrumental in motivating the farmers to do multi-cropping, engage in the seed production business and carry out trials at a smaller. It is also helping DMFPCL seek credit from the local bank branch, even as they wait for their equity matching grant from SFAC.
With support from Prakriti Foundation, an entrepreneurial CEO Rakesh, a proactive BoD, and supportive institutions in the ecosystem, DMFPCL is all set to overcome the Covid setbacks in processing and marketing. This year could end up being crucial for the FPO in leveraging the synergy and goodwill of stakeholders into persistent benefit for its members and profits for the FPO. Prakriti Foundation has rightly changed its role as a facilitator of linkages with the local ecosystem with the FPO at the centre.
Abhishek Saxena is an FPRM student at IRMA
Prof. Shambu Prasad is a Professor of Strategic Management and Social Sciences at IRMA