In News Farmers in Maharashtra form a company to procure from farmers FPC

  • FPCs are village level companies registered under the Companies Act.
  • FPCs work on the principle of aggregation and improve the bargaining power of farmers both in the wholesale markets as well as in the market of inputs such as fertilisers and seeds.
  • FPCs can improve the returns, farmers get for their produce while possibly reducing the prices that consumers pay for the final product.
  • In the Union Budget 2018-19, the central government had announced a five-year tax holiday for FPCs with the hope that these bodies would allow farmers to earn more.
  • FPCs are being viewed as a possible replacement for the old cooperative model .
A CASE OF Maha FPC: How FPC’s can be remunerative as well as cost effective
  • In the past few weeks, National Cooperative Agricultural Marketing Federation (Nafed) procured 30,000 tonnes of onion to cool down onion prices.
  • Out of 30,000 tonnes, about 25,000 tonnes has been produced through MahaFPC.
  • A total of 3,456 farmers sold around 25,000 tonnes of onion with the total purchase value amounting to Rs 30 crore.
  • Price Realisation By considering the nearby mandi prices Price discovery was done.
  • How they were able to attract CO-Farmers
  • MahaFPC paid Rs 2- Rs 3 per kg higher than the prevalent prices in nearby Mandi’s.
  • Added advantage to farmers is that they were able to save on transport cost as it is taken care by FPC.By this way they were able to attract procurement from their members.
  • In return, FPC’s are paid by Nafed for the incurred processing and handling charges.
  • Also, the facility to store onions in the fields itself in the dust- and moisture-proof storage structures (popularly known as kanda chawls) helped saving the cost further.
  • Another development is sorting and grading of onions is done before they are stored.
  • Payment process has also been streamlined:
  • The chawls are geo-tagged so, once the produce was weighed and stored, the FPC will submit their bills electronically to MahaFPC, which, in turn, forwarded the details to Nafed.
  • Farmer’s details such as land, bank and Aadhaarare collected by FPC and final payments were made directly into the bank accounts of the farmers by the FPCs.