The establishment of Farmer Producer Organisations (FPOs) in the early 2000s was a significant initiative by the Government of India to support small and marginal farmers. The aim was to help these farmers achieve economies of scale, enhance their bargaining power, double their income, and access global markets. FPOs have been inspired by similar models in countries like Mexico, Thailand, and China, which have successfully enabled small farmers to enter the export market.
Challenges Faced by Small and Marginal Farmers in India
- Representation: Small and marginal farmers constitute 86% of India’s farming community.
- Lack of Resources: These farmers lack access to essential inputs, credit, modern technology, and infrastructure.
- Limited Market Connectivity: They struggle to connect with global sourcing firms and buyers.
Formation and Promotion of FPOs Scheme
In 2021, the Indian government launched the Formation and Promotion of 10,000 Farmer Producer Organisations Scheme with an allocation of ₹68,650 crore. The objective was to form and promote 10,000 new FPOs nationwide.
Findings from the ICRIER Survey
A survey by ICRIER covering 43 FPOs and over 200 member farmers highlighted persistent challenges:
- Market Access Issues:
- 80% of FPOs reported difficulty in identifying and reaching buyers, manufacturers, processors, and exporters.
- Companies and foreign sourcing agents stated that they were unaware of which FPOs specialized in specific products, such as spices.
- Despite over 8,000 FPOs being registered with the Ministry of Agriculture, detailed product information was unavailable.
- Complex Standards and Compliance:
- Multiple standards by agencies like FSSAI, BIS, APEDA, and others confuse FPOs.
- Domestic standards often do not align with international requirements, leading to product rejections.
- 72% of FPOs found the domestic standard-setting process complex and lacked information on export market standards.
- E-Commerce Knowledge Gap:
- Limited knowledge about leveraging government initiatives like ONDC and eNAM.
- No turmeric FPOs were listed on the ONDC platform as of November 2024.
Success Stories: Lessons from Kandhamal Turmeric FPOs
The Kandhamal Apex Spices Association for Marketing (KASAM) in Odisha is a notable success story:
- Collaboration with Kisan Saathi helped Gumapadar FPC Ltd. and Sastri FPC Ltd. export Kandhamal turmeric to the NedSpice Group in the Netherlands.
- Strategic partnerships and coordinated efforts enabled these FPOs to overcome market barriers and achieve global reach.
Recommendations for Scaling Up FPOs
- Comprehensive Database:
- Develop a detailed, product-specific database for FPOs to enable global buyers to locate relevant FPOs.
- E-Commerce Integration:
- Increase support for onboarding FPOs on platforms like ONDC and eNAM.
- Educate farmers on leveraging these platforms for market expansion.
- Knowledge Transfer:
- Provide training on global compliance standards, such as sanitary and phytosanitary measures.
- Offer product-specific guidelines for key markets.
- Scaling Best Practices:
- Promote successful examples like KASAM through knowledge-sharing initiatives.
Multiple-Choice Questions (MCQs):
1. What was the primary objective of establishing FPOs in India?
A. To promote organic farming
B. To help small farmers achieve economies of scale
C. To replace traditional farming practices
D. To reduce government intervention in agriculture
Answer: B) To help small farmers achieve economies of scale
2. How much budget was allocated for the Formation and Promotion of 10,000 FPOs Scheme?
A. ₹50,000 crore
B. ₹68,650 crore
C. ₹75,000 crore
D. ₹80,000 crore
Answer: B) ₹68,650 crore
3. Which of the following is a challenge faced by FPOs in India?
A. Lack of registered members
B. Overproduction of crops
C. Difficulty in identifying buyers and exporters
D. High export tariffs
Answer: C) Difficulty in identifying buyers and exporters
4. Which organization collaborated with KASAM to promote Kandhamal turmeric globally?
A. NedSpice Group
B. Kisan Saathi
C. APEDA
D. FSSAI
Answer: B) Kisan Saathi
5. What percentage of FPOs reported challenges with the domestic standard-setting process?
A. 50%
B. 60%
C. 72%
D. 80%
Answer: C) 72%
6. What is the primary reason global buyers reject products from Indian FPOs?
A. Low-quality products
B. Misalignment with international standards
C. High pricing of products
D. Limited availability of products
Answer: B) Misalignment with international standards
7. What does ONDC stand for?
A. Open Network for Domestic Commerce
B. Online Network for Digital Commerce
C. Open Network for Digital Commerce
D. Online National Digital Commerce
Answer: C) Open Network for Digital Commerce
8. Which state is associated with the success story of Kandhamal turmeric FPOs?
A. Maharashtra
B. Odisha
C. Karnataka
D. Gujarat
Answer: B) Odisha