Assessment of constraints and strategic interventions for strengthening farmer producer organizations in Uttar Pradesh

Introduction

In the present condition, Indian agricultural sector is facing various challenges like increasing population and small and fragmented land holdings results in declining agricultural land availability, most of the agricultural lands are occupied for non-agricultural purposes due to urbanization and industrialization, disinterest of youth towards agriculture sector, absence of proper strategy to organize farmers and link with the market. Due to poor storage and processing facilities, more than 45% of fruits and 30% of cereals are wasted. Post-harvest losses of food grains in India account to 10% of total production i.e., 20 Mt which is equivalent to the total annual food grains production of Australia. (TACSA Report on Secondary Agriculture, 2013). Small and marginal farmers productivity is better than that of medium and large farmers, but their economic situation is worse. Various factors have contributed to the economic disparity. The main reason is that small farm sizes lead to weak negotiating power in both the input and output markets. Small farmers in developing countries face various challenges in selling their goods due to high transaction costs in the supply chain. Small and marginal farmers lack the resources for transportation and managing fixed assets due to the income-to-consumption gap. They are also unable to invest in innovations that improve productivity and value addition, restricting their ability to increase their production and effectively market their goods. Furthermore, farmers lack bargaining power because of information asymmetry, resulting in unequal distribution of value addition among market actors, especially among those producing seasonal and highly perishable agricultural products. According to Pingali et al. (2005) [8] , high-value crops are difficult for marginal and small farmers to adopt, because they are mostly perishable and have high transaction costs. There are several ways of collective action (Through producer organizations) that can minimise transaction costs and promote commodity market development and coordination (Jaffee 1995; Staatz 1987) [6,11] . Private involvement is being promoted through contract farming, especially after the amendment of the Agriculture Produce Marketing Committee (APMC) act in 2003, in response to the problems faced by small and marginal farmers at the market end of the agriculture value-chain. Contract farming is agricultural production based on a corporate-farmer arrangement for the production and supply of agreed-upon quantities of a commodity that meets certain quality requirements (FAO, 2014) [2] . However, contract farming arrangements tend to exclude small producers (Gill, 2004; Hazell, 2005; Singh, 2009; Pritchard and Connell, 2011) [3,4,10,9] and in many instances have benefited buyers at the expense of producers (Hellin et al., 2009) [5] . Agricultural cooperatives, which were formed under the Co-operative Credit Societies Act of 1904, have long been the most common form of farmer collective; however, cooperatives have too many weaknesses that hinder successful collective action. To resolve the challenges faced by small and marginal farmers, the Indian government has promoted a new type of collective action known as Farmer Producer Organizations (FPOs). Particularly to improve access to investments, technical advances, and efficient inputs and markets. (Hellin et al., 2009; Department of Agriculture & Cooperation, 2013) [5] .

Formation and Development of Producer Companies (PCs)

The formation and development of PCs are being actively undertaken by government and their agencies with major financial support from the Small Farmers Agri-Business Consortium (SFAC) and the National Bank for Agriculture and Rural Development (NABARD), with technical support from resource support agencies. A total of 7,381 PCs were registered by March 2019, across 33 states and union territories, and 2,749 PCs were active as of March 2018 (Shilpa, 2020) [12] . FPOs is a means to bring together the small and marginal farmers and other small producers to build their own business enterprise that will be managed by professionals. Small Farmers Agribusiness Consortium (SFAC) is providing support for promotion of FPOs. Farmer Producer Organizations (FPOs) also referred as Farmers Producer Company (FPC) is a generic name for an organization of producers who produce agricultural produce. FPO is a registered body and a legal entity formed by a group of primary producers who claim chief shareholders in the organization. It deals with business activities related to the primary produce/product/related inputs and it works for the benefit of the member producers. Portions of profit are shared among the producers and the balance goes to the share capital or reserves. It has minimum shareholding members numbering 50 at the time of registration. However, the shareholding membership will have to be increased over a period of 3 years to a sustainable level (Krishna et al., 2018) [7] .

Methodology

The study was conducted during the year 2022-2024 in Kushi Nagar and Deoria districts of Uttar Pradesh. In Uttar Pradesh state comprised of seventy-five districts, out of this Kushi Nagar and Deoria district were selected purposely for the study to understand the ground reality of FPO members with respect to the issues in the FPO. Kushinagar district has 14 community development blcoks. Out of these two block was selected for the study which is Kasia & Padrauna. While, Deoria district has 16 community development blocks. Out of these blocks two blocks was selected for the study which is Desahi & Tarkulwa. A list of FPOs from selected blocks was prepared. From this list, three FPOs were selected for the study by random sampling method form each block. An equal number of FPO members was selected from each of the selected FPOs so as to make the sample size of 300. To select sample units, stratified random sampling method was adopted in each FPOs.

Results and Discussion

Here is a summary of the findings for each statement: A perusal of the Table 1 indicate that the maximum number of the respondents. 96 mean score value with adopt a rank of first were agreed with the statement that "Lack of scientific storage facilities" is the common problem, followed by "Frequent price fluctuations" at ranks second, "High cost of inputs and services" at rank third, "Lack of knowledge on subsidy by government on material inputs" at rank fourth, "Inadequate credit facilities" at rank fifth, " Lack of transportation facilities" at rank sixth, " High commission charges" at rank seventh, "Lack of market information and news" at rank eight, "Power cuts" at rank ninth, "Adverse climatic conditions" at rank tenth, respectively.

Suitable strategies for overcoming the constraints

A perusal of the table 2 indicate that the suggestive measures as stated by the FPO members can be placed in a rank order "Flexible sources of credit must be there "at rank first, "Government should provide transportation facilities" at rank second, "Providence of knowledge about value added products production" at rank third, "Contact from nearest KVK " at rank fourth, "Government/Agencies should provide training on new technologies to the farmers" at rank fifth, "Government should provide risk coverage for vegetable crop" at rank sixth, "Government should provide proper marketing facility" at rank seventh, "Demonstration of different scheme should be organized" at rank eight, "Government should focus on providing proper supply of electricity" at rank ninth, "Providence of skilled farm workers" at rank tenth, Respectively. www.extensionjournal.com

References

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