Farmer Producer Companies (FPOs) registered under Companies act along with its counterparts such as societies, cooperatives etc plays very important role in creating a conducive environment for the farming community.
The FPOs are formed in hundreds of numbers across India while focusing groups of villages to make sure that, the FPOs can extend services to the shareholding farmers easily and effectively.
But, even after extending many supports under various schemes by the Government through Small Farmers Agribusiness Consortium (SFAC), NABARD, Agriculture, Horticulture, Sericulture departments etc the FPOs are found to be little effective in reaching the formation objectives.
Such FPOs require an innovative and co-creating models to grow, sustain & extend services to its shareholders. Deshpande Foundation, Hubli from 2018 working on such models, systems & processes which can help/facilitate these FPOs to attain sustainability through its “DF APEX FPO Model”.
FPOs are formed and managed by the experienced NGOs, Institutes etc and are fully engaged with them for 3-5 years as part of the MoU between sanctioning institutions. Also, it is observed that, any FPO to reach out to a decent position with better compliance, governance and business takes 3-5 years.
What happens during formation of the FPOs and the type (type in terms of passion & commitment) of BODs will have maximum implication on the growth of the FPOs. With all odds if the FPOs works on market linkages most of them stops at Inputs business activities.
Output market linkage and the next level i.e., value addition are those activities which will take FPOs towards sustainability and help to reaching FPOs formation objective. Hence, an overall growth pattern with sufficient cushion for the FPOs to involve in complex business activities are highly important in the present scenario.
Deshpande Foundation has been working on this model from 2019 and has taken up various trials and seen both success and failures. Accordingly, DF APEX FPO model now is in a stage where it can extend support to other FPOs.
1. Formation & Management
4. Knowledge Dissemination
7. Village Level Entrepreneurs
10. Supply Chain
5. Market Linkage
8. Stakeholder Management (Demand, Fund, Technology & Partners)
6. Market Intelligence
9. Value addition, Advocacy & Extension Services
DF APEX FPO Pilot engaged with FPOs from 2019 covering North, Central & South Karnataka. As of now there are 20 FPOs working in this model and each 20 FPOs are destined to become a Lead FPO in a District. The Lead FPO of a district will facilitate the member FPOs and works specifically focusing in a district which we would like to call as “Cluster Approach”. The idea will be successful only if the community takes ownership of the FPO activities.
DF APEX FPO model need to support 150 FPOs covering 15 districts in Karnataka in 5 years.
|Objectives Hierarchy||Indicators||Sources of Verification|
|Ecosystem –partners & strategies||# Improved ecosystem for FPOs to run their business activities.||# Increase in farmers selling to FPO||# LMS Analytics|
|# Compliant and better governed FPOs.||# FIG participation in agribusiness||# Surveys with end users|
|# Increase in FPO business activities and thereby increased returns to farmers||# Increase in FPO market credibility||# FPO documentation|
|# FPO turnover||# FPO MIS|
|Business Cases – Commodity specific||# Focus on major crops with high volume targets||# Listing Focused vs progressive commodities||# Aggregation & supply|
|# Creating VLE centric hub models||# Network of aggregators working for FPO||# MoU between FPO & VLEs|
|# Incentivization & flip-business model setup||# Active & revived FIGs as true customers of FPO||# Active Agribusiness with individual FIGs|
|# FPO MIS|
|Governance connected with FPO Compliances||# Transparent & ethical FPO administration||# No. of FPOs with all compliances||# Timely effective AGM|
|# Financial management with MAKER-CHECKER model||# No. of FPOs adhering to good governance||# FIG documentation & meetings|
|# Person Independent SYSTEMS & PROCESS||# Increased FPO social status||# FPO communication with shareholders|
|# More active participation of FIGs||# Clear FPO Financials|
|# Clear FPO documents & MIS|
|Trained FPO staff||# Active & learned staff at ground level||# Focused & productive staff||# Performance depending KRAs|
|# Organized & oriented team of VLEs||# Clear job roles||# Organized and task specific personnel|
|# Learned CEO||# Clear jurisdiction and verticals||# Clear Job Description with Roles & Responsibilities|
|# Technology Intervention|