The Balancing Act: Mitti, Members and Markets
Updated: Jun 16, 2021
Most collective enterprises work with their members in aggregating demand for providing agricultural inputs – largely agrochemicals. However, few promoting institutions and Farmer Producer Organisations (FPOs) engage in the long road of transiting from a more efficient middleman in the short run to being a friend of the farmer and the soil through sustainable agriculture. The Samaj Pragati Sahyog (SPS), and one of the earliest FPOs in the region, RRPPCL, presents interesting insights into creating an entrepreneurial ecosystem with stakeholders to manage sustainable transitions.
Trials and tribulations of being relevant in the market
SPS has been working in the Dewas district of Madhya Pradesh and nearby areas since the 1990s and is known well for its expertise in natural resource (and watershed) management and agroecology. Their training center, The Baba Amte Centre for People's Empowerment (known as Kendra locally), is set in a remote village of Neemkheda, in Dewas. SPS's work in agriculture began in 2006 by forming Self Help Groups (SHGs) of tribal women. Farmers in the region were dependent on the local traders and input dealers for expensive agri- inputs and credit to cover the costs. Formal credit was provided to them by linking these SHGs to banks, thus helping rainfed farmers break the trap of high input cost. Later, the tribal women tried aggregation and direct marketing of produce at the local APMC, but they were met with stiff resistance from the local traders who complained to APMC authorities. The traders argued that since the land was not registered in women's name or the SHG, they could not market their produce at the mandi. To resolve this problem, the most feasible legal route was creating a Producer Company and thus, Ram Rahim Pragati Producer Company Limited (RRPPCL) was incorporated on April 19, 2012.
RRPPCL grew organically out of the work of SPS on Non-Pesticide Management (NPM) of crops. Community resource persons (called khet mithaan locally) are responsible for the diffusion of the cultivation practices, introducing improved varieties of crops and sampling of the NPM produce at the time of harvest, with each one responsible for around 20 SHGs, each having 350 members.
The current CEO of RRPPCL, Rajat Tomar, is an IRMA graduate and has been with the FPC since 2019. Interactions with Rajat and Animesh Mondal (the representative from SPS) made it clear that RRPPCL has been growing consistently even as they have had to make strategic shifts to suit the diversified crop mix of rainfed farmers. In the last three years (2017-18, 2018-19 and 2019-20), RRPPCL has achieved a turnover of more than Rs. 5 crores with the profit reaching more than Rs. 10 lakhs, while maintaining a focus on its social and ecological responsibilities.
The FPC as a federation of the SHGs
The FPC is organised as a federation of SHGs of women farmers. Currently, 304 such SHGs are members of the RRPPCL, comprising of 5000 women farmers. There are six directors on the Board of RRPPCL who regularly interact with the CEO. The SHGs, at their level, elect a leader and promote good agricultural practices such as NPM agriculture. It is not necessary that every member of the SHG will cultivate and aggregate NPM produce; however, those who do so aggregate their produce at the cluster level collection center. Five such collection centers are catering to 50 villages in the region. Mithaans are responsible for sampling and facilitating the aggregation of the crops post-harvest and are supervised by a supervisor at the collection center who directly interacts with the CEO of RRPPCL.
Sustainable agriculture commitments at the center of RRPPCL’s growth story
RRPPCL has undergone many changes as far as their business models are concerned, from marketing member produce to APMC to trading soybean in Commodity Exchange to focusing on seed production. Currently, the FPC is clear on selling branded seeds to their members and having forward contracts with a few buyers, a major one being Safe Harvest Pvt. Ltd (SHPL), a social enterprise that partners with FPOs to procure NPM cereals, pulses, spices etc. Commodity-wise also, the RRPPCL stopped procuring soybean and has moved to wheat, chickpea, red gram and mung in Kharif and jowar and maize in Rabi. This change reflected the FPC's vision of crop diversification and usage of NPM techniques of cultivation.
RRPPCL has excellent linkages with its promoting institution SPS, its forward partners and buyers like SHPL and Kasyap Sweeteners Ltd. It also has linkages to Avantee Mega Food Park, a public-private partnership, for accessing processing facilities for wheat and chickpea and cold storage. Other partners are Non-Bank Financial Companies like Nabkisan, FWWB, Avanti Finance and banks.
Shashank Shrivastava, from SHPL, explained that the relationship between RRPPCL and SHPL is more than just a buyer-seller or partner. SHPL also plays a role in training and handholding FPC staff and helps RRPPCL decide on its production and pricing strategies.
The everyday business and the Mega Food Park
The visit to the Avantee Mega Food Park, Dewas provided a glimpse of the business operations of RRPPCL. The FPC has a facility that can process up to 10 MT/day of wheat or pulses. The facility has hermetic cocoons for storage of processed flour, daliya, and processed pulses waiting to be transported to Delhi-NCR, Hyderabad, Bengaluru, Pune, Mumbai and Chennai, based on the demand from SHPL. Manual packaging is done according to the demand of SHPL.
Positive externalities of SPS-RRPPCL-led interventions
RRPPCL has brought positive changes in the market too. Due to a competitive yardstick function, other traders have started offering higher prices to the farmers, and there has been a reduction in fraudulent practices.
RRPPCL balances the use of technology for quality assessment with the experience of locals, who are innovative and device methods for quality assessment of crops that are cheap yet reasonably accurate. Due to the FPC's interventions, women farmers in the region have become aware of market prices and do not let even RRPPCL become the price giver. They actively negotiate. SPS's work in Natural Resource Management (NRM) has resulted in the villagers growing a Rabi crop in the region. Earlier, this was the dry season, and most of the men and women left to work on the larger farms as farm labour.
RRPPCL has been able to sustain its business with the help of SPS and with strategic linkages with SHPL and Avantee Mega Food Park. It has not been an easy journey for RRPPCL. However, the unwavering focus on NPM agriculture and the decision to work with women farmers shows that RRPPCL keeps the benefit of members and the environment at its core.
Abhishek Saxena is currently pursuing his FPRM in Rural Management from IRMA. His research interests include Farmer Collectives, FPOs, co-operatives, and social enterprises.