From an informal group to a successful business for rainfed farmers - The case of Janajeeevana MACS
While the journey of building strong and viable FPOs are challenging in general, FPOs in rainfed areas face additional risks and uncertainty owing to the terrain and lack of capital. Janajevana MACS is a farmer collective from one of the most drought prone districts of the country which is evolving rapidly to suit the market demand and establish itself as a successful business entity.
FPO for rainfed farmers
Rainfed areas pose special challenges to farmers and their collectives. The cyclical nature of droughts, diversity of situations and produce, low input use, and multitude of livelihood portfolios are characteristic of these areas. Markets demand uniformity and consistency in supply of few products in greater volumes. Catering to these demands of the organised markets usually translate into FPO members having access to irrigated lands. The very nature of dry, rain dependent production severely challenges the FPOs in meeting this market demand.
Anantapuramu is one of the most drought prone districts in Andhra Pradesh with over 90% of the agriculture under rainfed conditions. The diverse cropping pattern has faded away with an increasing monoculture of groundnut over the last three decades. Often the erratic monsoon leads to crop failure forcing the farmers to resow groundnut seeds. One of the mitigation strategies implemented by the government to reduce the risk faced by the farmers is to provide subsidized seeds. The entire seed production system starting from breeder seeds, foundation seeds, certified seeds and truthful seeds get a subsidy ranging from 33% upto 75% of its price. A decade ago, the actual benefit of this subsidy hardly reached the farmers as the seed market was controlled by a nexus created by private traders and other stakeholders in the seed production and supply chain. However, now, the evolution of the Community Managed Seed System (CMSS) institutionalized through farmer collectives called Mana Vithana Kendras (MVKs) has successfully replaced the private players with an efficient and transparent seed production and supply system. MVKs were run in a quasi-business mode with the cost of procurement, processing, certification, bagging and distribution built into the groundnut seed price announced by the Government.
Informal groups to a farmer cooperative
Janajeevana has been evolving over the years from Common Interest Groups (CIGs) that were formed during programs like Andhra Pradesh Drought Adaptation Initiative (APDAI) and Rainfed Land Development Project (RLDP) to a successful farmer enterprise. The member relations and social capital gained during these programs came in handy to launch their own cooperative. Janajeevana Mutually Aided Cooperative Society Ltd (MACS) was registered in the year 2012, in Nallacheruvu Mandal, Kadiri division of Anantapur district. During the initial three years, Janajeevana was mostly into promoting thrift and credit in smaller common interest groups and exploring bank linkages, rather unsuccessfully.
Participation in CMSS brought professional training to the Board and executive members in Janajeevana. Committees were formed amongst the members on procurement, quality assessment etc. These committees established were well trained on the standards and procurement processes. This training brought professionalism in Janajeevana not only in groundnut seed production, procurement and supply but also, in exploring markets. These skills came handy in expanding the scope to seed sales to open markets (non-subsidy) and sale of navadhanya seeds. The procurement and distributions programs of CMSS generated significant revenue surplus which has allowed them to expand the portfolio. These capacities also helped in successfully exploring new market channels such as selling groundnut and other commodities to local supermarkets.
Promising business growth
Role of Janajeevana as MVK in CMSS provided a platform to access considerable working capital from the public seed-procurement program. Janajeevana’s journey as a collective enterprise of farmers has achieved high revenue growth with a small member base but has built a large production base of seed producing farmers while ensuring supply of quality groundnut seed locally. As on April 2021, Janajeevana had a total membership of 303 farmer members with an equity share capital of 2.66 lacs and a turnover of Rs 1.75 crores for FY 20-21. It had Rs.38 lakhs as a sanctioned loan from NabKisan.
Janajeevana has also been promoting a multi-cropping system called ‘Navadhanya’ under which 8 to 10 additional crops such as bajra, jowar, pigeon pea, green gram, cowpea, horse gram and vegetables are sown together with the main crop groundnut. The cooperative started working with farmers to multiply local seed varieties of these crops and sold them in kits of 5 kgs (recommended seed rate for the additional crops). Though the navadhanya system was supported by a State subsidy only for the initial few years, the cooperative continued the production and supply of Navadhanya seed kits due to the positive response and demand from farmers. In Kharif 2021, the cooperative sold 1265 Navadhanya seed kits worth Rs. 3.8 lakh covering 3000 acres. Promotion of Navadhanya also helped Janajeevana in diversifying its portfolio of products marketed to retail stores subsequently.
Diversity in operations, commodities and investment portfolios is central to the success of Janajeevana in the rainfed systems. Adequate grant investments in aligning the production systems to the agro-ecology, risk mitigation through diversification and strengthening production systems were the key features of Janajeeevana. These measures provide an economic basis for FPO’s growth and internalize the input and service economy and accessing multiple markets.
Seed business as a launchpad
Seed business has often played an important role in bringing sustainability to the business activity of many FPOs. Janjeevana goes a step further by tapping in the public resources available for seed system to build the initial business and strengthen the member relations. The working capital which is often the bottleneck in any commodity business had come from seed corporation for the procurement operation. This acted as a launchpad to the FPO and gained a reasonable surplus that would allow them to diversify and expand their business. This would also allow them to expand their farmer member base. Though seed production and supply are the core of business till now, Janajeevana is looking forward to establish its supply chains and strengthen its value addition processes that would make them sustainable amid the changing socio-political context. Further, Janajeevana is planning to diversify its market base to reduce the risk in their business operation.
Siva Muthuprakash K. M. is a researcher and has been working on farming and farmer development indicators for over seven years.
Gijivisha Khattry is a development professional at WASSAN, with over 3 years of experience in promoting sustainable rural livelihoods.