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Where does the story of a Farmer Producer Organisation (FPO) begin? While the registration of an FPO might mark its official journey, there is a lot of groundwork needed to make such organisations self-sustaining. The task is not unlike the preparation of the soil before actual sowing can take place. Producer organisation promoting institutions (POPIs) play a critical role in creating healthy strata on which FPOs can grow. This work is time-taking and difficult to quantify and measure. Our recent field visit to an FPO in the Saurashtra region of Gujarat gave us a glimpse of the range of support that an FPO might need. Sorath Farmer Producer Company Limited (henceforth Sorath FPC or simply Sorath) is being supported by an NGO called Shikshan ane Samaj Kalyan Kendra (SSKK), in partnership with Better Cotton Initiative (BCI). As we spoke to various people involved in SSKK, BCI and Sorath FPC, an intricate story began to emerge.
The journey of SSKK
Mr. Dhirajlal Vaghadiya (Dhirubhai), the founder of SSKK has been involved in development issues from an early age as a student activist. In 1992, his group moved away from protests and agitations to associate with government programs in vocational training. They also took up programs in women and family counselling and childcare in Khambha and Dhokadva areas. They ventured into education and health with their programs in career counselling and health counselling with adolescent girls.
Their entry into Natural Resource Management (NRM) and agriculture began when the Department of Rural Development and Agriculture (DRDA) began its watershed development program in 1998. Most of the villagers being farmers, they soon started coming together to discuss other issues as well. Since the soil and water conservation work was mostly taken care of, they started focusing on issues of cost-reduction for agriculture and better market linkages. They also voiced their need to be informed about newer methods in farming and reducing the use of pesticides and fertilisers. This, according to Dhirubhai, led to SHGs being formed and later federated under Avirat Agro Producer Co. Ltd., one of the first FPOs in Gujarat, established through NABARD support.
Sorath FPC: An enterprise trying to keep afloat
As we travelled across the dry scrublands of Gir region to meet staff and board directors from Sorath FPC, unexpected rainfall caught us by surprise. We passed numerous cotton fields that would suffer from fungal diseases due to such unseasonal rainfall.
At the Sorath FPC office, we were greeted by the staff present there: Ramji Bambhaniya the CEO, Bharat Singhad the representative of BCI, and Kaushik Pandya, the agri-extension officer. Bharatbhai has done his graduation and Masters in rural studies (a unique program offered in some Gujarat educational institutes). He has been associated with BCI through Cotton Connect for the past 5 years. He has been supporting the Sorath FPC as a knowledge partner since its inception. Bharatbhai's passion for the work is reflected in his social media profiles on Facebook and his YouTube channel called Khedut Sathi.
We talked about the basic details of the FPC and moved to discuss how it came about. The FPC was registered in 2016, although mobilisation had started through support of SSKK and BCI in 2015. There are 583 members and a board comprising of 11 members, five promoters, five additional directors and one-woman director (also the vice-chairperson). While the presence of a woman in the decision-making committee is welcome, we realised that the arrangement was made due to the requirement of female leadership by NABARD. In other words, the presence was more tokenistic in nature, as most discussions and decisions seemed to happen through her husband.
Bharatbhai told that BCI and the Sorath FPC were trying to push the farmers towards growing organic cotton. BCI is working with 4460 farmers in 37 villages spread over three clusters in two districts. They work on aspects of Integrated Pest Management (IPM) in agriculture, optimal management of water, banning the use of pesticides like monocrotophos etc. by facilitating four trainings per year for farmers.
Ramji bhai mentioned that the initial years were good for the FPC in terms of turnover, and they even got an award from NABARD for good performance. However, issues cropped up between the BoD and the chairman over sharing of MSP commission earned through the sale of groundnuts. Things have begun to sort out, but the incident has been a major setback. The ex-CEO of the FPC, Ashwin Shingad felt that BoDs should not be related to each other as it creates a conflict of interests, and power remains concentrated within a particular caste. The FPC has also been struggling to get a warehouse to store their produce and negotiate better prices yet hope to overcome these obstacles and even plan to set up an oil mill.
Reflections: an FPO needs an ecosystem to thrive
This case of Sorath FPC gives a glimpse into the complexities of managing an FPO and the importance of the POPI. There are many efforts that take place before an FPO is formally registered, much which depends on initiatives undertaken by the POPIs. Inter-caste and class dynamics make power relations difficult to handle unless there is guidance from someone (outsider mostly) who is seen as a mentor, especially to settle disputes. Material infrastructure is a necessity before an FPO tries to expand its business, else they remain confined to agri-inputs or tying up with other organisations for immediate procurement. In terms of participation, women need to be more involved in decision-making processes, but this requires more sustained efforts to empower women and make their presence more welcome in male-dominated settings. Farmers need more incentives to diversify their cropping patterns rather than relying only on cash crops such as cotton and groundnuts. Support from organisations such as BCI and SSKK needs to continue until Sorath FPC gains enough capital and governance mechanism to sustain itself.
In the current context of implementing the new operational guidelines for FPOs, NABARD, SFAC and NAFED have come up with a criterion of at least Rs. 2 crore turnover over past three years, for FPO promoting organisations to enlist as Cluster-based Business Organisations (CBBOs). This criterion will exclude all grassroots organisations like SSKK, who have a vast experience in the field and understand the local context very well owing to their long association with the region in various kind of interventions across sectors and domains. How will the newer CBBOs build their goodwill in the villages and provide the much-needed support, while understanding the local context of FPOs, remains to be seen.