Problems faced by the stakeholders of Farmer Producer Companies (FPCs) in Dharwad District

Introduction

Agriculture including allied sectors in India contributes 18.2 per cent of the country's GDP while also providing a living for more than half of the population (Economic Survey 2023-24) A majority of farmers (86.1%) fall into the small and marginal categories, with an average land holding size of 2 hectares. The small farmers with weak bargaining powers suffer from greater dependency in the cultivation and monopolistic exploitation under formal contracts (Bachke, 2009) [2] . To bridge the gap between farmers and consumers, the Government of India introduced innovative institutional frameworks aimed at empowering farmers to compete in the evolving agro-food systems. Following the recommendations of the Y.K. Alagh Committee in 2001, amendments to the Companies Act, 1956, led to the creation of the 'Producer Companies' (PC) concept. These PCs offer smallholder farmers a platform to enhance their skills, increase revenue, and strengthen their bargaining power in both production and marketing. Producer Companies serve as conduits for technical knowledge, improve production efficiency, reduce transaction costs, and assist in marketing produce, all while building social capital within farming communities. In the context of globalization and climate change, producer organizations have emerged as crucial institutional safeguards, protected farmers' interests and facilitating their access to profitable agro-food networks (Trebbin and Hassler, 2012) [6] . The success of Farmer Producer Companies (FPCs) hinges on the active participation and collaboration of diverse stakeholders, including smallholder farmers, financial institutions, government agencies, and private sector players. However, despite their potential to empower farmers and improve rural livelihoods, FPCs often face a range of challenges that hinder their full impact. Key issues include limited access to capital, fragmented supply chains, inadequate technical support, and the complexities of navigating regulatory frameworks. These problems can weaken trust, disrupt coordination among stakeholders, and limit the effectiveness of FPCs in delivering tangible benefits to their members. Understanding and addressing these stakeholder-specific challenges is crucial unlocking the full potential of FPCs and ensuring their sustainable growth in India's evolving agricultural landscape.

Methodology

The present paper concentrates on problems faced by the FPCs in Dharwad. This district had good number of functional FPCs sponsored by different agencies and there were no similar studies conducted previously in this district.

To assess the problems faced by the stakeholders of the FPCs, care has been taken to select those FPCs which have been established and completed three years of their existence. Accordingly, three FPCs each in Dharwad and Kalghatgi taluk and one each in Navalagund, Hubbaliand Kundgol taluk were fulfilling the criteria. Hence, two each FPCs from Dharwad, and FPCs from Kalaghatgi, one each www.extensionjournal.com from Hubballi and Navalagund taluks were selected for the study. Thus, total six FPCs were selected for the study, which formed 66.67 per cent of FPCs that have completed three years of their existence. From each select FPCs two employees, three Board of Directors and 20 members were randomly selected. Thus, making a sample size of 12 employees, 18 Board of Directors and 120 FPCs members as respondents. The primary data were collected from the members of FPC, employees and board of directors of FPC. The Garrett's ranking technique was employed to assess problems faced by the stakeholders In this approach, respondents were asked to rank all the problems and the resulting rankings were transformed into score values using the following formula.

where, Rij = Rank given to i th item by j th respondent Nj = Number of items ranked by the j th individual. To determine the significance of each problem, the scores of each individual were summed and the mean values were identified as the most important. The highest score was assigned the first rank, followed by descending ranks for subsequent scores in order.

Results and Discussion

Before delving into the challenges faced by FPCs, it was felt necessary to introduce the general features of FPCs as it gives an insight into the area coverage, crop covered capital structure, etc. No. of linkage agency

General features of FPCs selected for the study

Resource Institute

The Table 1 provides The number of linkage agencies, which provided crucial support and resources, varied widely, with SSFPC having the most (8) and JFPC the least (2). SSFPC had the highest number of linkage agencies at 8, which indicated a wellestablished network for support and resources. This extensive network enhanced the FPC's capacity for technical assistance, market access, and financial support. In contrast, JFPC had only 2 linkage agencies, suggesting that it was still in the process of building its network. The limited linkages affected the availability of external support and resources, potentially hindering its growth and development.

Problems faced by the stake holders of FPC Different stakeholders of FPCs includes the form members, BoDs, and employees the problem faced by them are discussed separately as below

Problems faced by the members of FPC

The Table -2 explains the evaluation of challenges faced by FPC members, as indicated by Garrett Scores and ranks, revealed several critical issues affecting their operations. The most pressing problem was the low procurement of farmer produce from FPCs, which ranked first. This issue reflects inefficiencies in the procurement process, where members struggle to sell their produce efficiently. Closely following this, the lack of financial assistance from FPCs, with a Garrett Score of 6470, ranked second. This highlights the need for better access to financial support, which is essential for sustaining and growing agricultural activities. The third-ranked issue, with a Garrett Score of 6382, was the absence of custom hiring service centre (CHSC) facilities. These centres are crucial for providing affordable access to equipment and machinery, which many small and marginal farmers cannot afford to purchase outright. As all these selected FPCs the small and marginal farmers had the chuck share thus the facility of CHSC were definitely cater the needs of larger section of members. The fourth major challenge was inadequate infrastructure, including storage facilities, cold chains, processing units, and transportation networks. These deficiencies severely limit farmers' ability to store and transport their products effectively, impacting market access and reducing potential profits. A fifth issue was the lack of frequent visits by FPC managers to the fields and the lacking in providing of market information, with a Garrett Score of 5214. This points to a gap in managerial support and the dissemination of crucial market intelligence that could help farmers to make informed decisions. Finally, the shortage of inputs for the production process, scoring 4890, ranked sixth. This reflects a systemic issue in the timely and adequate provision of essential inputs like seeds, fertilizers, and pesticides, which are crucial for successful farming. These findings, in line with the studies conducted by Venkattakumar and Sontakki (2012) [7] and Laxman (2019) [5] , emphasize that procurement, financial assistance, and infrastructure are the most pressing issues faced by FPC members. Both studies highlighted similar concerns, particularly low procurement levels and insufficient infrastructure, indicating that addressing these areas could significantly enhance FPC efficiency and member satisfaction. [3] reported comparable issues, including inadequate training programs and employee grievances with BOD decision-making processes.

Problem faced by the employees of FPC

Problems faced by the Board of Directors (BoDs) This points to the urgent need for better funding and financial resources to sustain the operations and initiatives of FPCs. The second major issue was the absence of an office building, with a Garrett Score of 905, indicating the necessity for a dedicated physical space to enhance organizational stability, professional management, and dayto-day operations. The limitation of membership ranked third, with a score of 890. This suggests that restrictive membership policies may have hindered the FPC's growth and inclusivity, preventing it from expanding its member base and enhancing its impact. Poor staffing was the fourth-ranked issue, scoring 875 This reflects the need for better human resource management and adequate staffing levels to ensure that FPC operations are well-supported and efficiently run. Lastly, the lack of proper infrastructure, with a score of 745 ranked fifth. This underscores the need for improved facilities, such as storage units, processing equipment, and transport infrastructure, to support the overall functioning and sustainability of FPCs. These findings are consistent with those reported by Evengy and Thomas (2016) [4] , whose study also highlighted that a majority of FPC BoDs faced challenges related to financial support. Addressing these key issues financial support, infrastructure, staffing, and membership policies would be essential for enhancing the effectiveness of FPCs and ensuring their long-term growth and sustainability. www.extensionjournal.com

Conclusion

The evaluation of challenges faced by FPCs reveals key areas that require attention for their sustainable growth. The most critical issues include low procurement of produce, lack of financial support, inadequate infrastructure, and overburdened employees. Addressing these challenges through improved financial assistance, infrastructure development, and better staffing policies will strengthen FPC operations. Initiatives such as increasing CEO salary slabs to attract skilled professionals and developing branding strategies for FPC products are crucial steps forward. With proper guidance from CBBOs, FPCs can enhance their economic position and better serve their members.

Acknowledgement

AcknowledgementI would like to thank all teaching staff of Department of Agribusiness Management and Department of Agriculture Economics UAS Dharwad, for their valuable inputs helped me to carry out the research successfully and all the CEOs, BoDs members and members of FPCs for their cooperation to carry out the research.

References

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