Govt focus on new 10,000 FPOs will benefit small farmers, says Agri minister

MUMBAI, 1 March 2022: Indian Agriculture and Farmers Welfare Minister, Narendra Singh Tomar said that the plan to form 10,000 new Farmer Producer Organisations (FPOs) in the country will benefit farmers.

Explaining further, the minister said that ministry will invest at INR 6865 crore that will greatly help crores of small farmers by significantly reducing their cost of farming, as well as improving the quality of their products in line with global standards.

Tomar was speaking at the FPO summit organized by CII & NCDEX IPF TRUST in partnership with NABARD and NABCONS.

The FPO summit was aimed at bringing together all the stakeholders in the agri value-chain connected with FPOs on a common platform and showcase how FPOs have been instrumental in impacting the entire agri value chain.

Stressing on the need for facilitating access to finance for FPOs, NCDEX managing director & CEO Arun Raste said that treating FPOs at par with farmers in terms of access to finance will provide a huge boost to the model. Another area of focus was creating awareness on alternate market channels.

Focussing on the importance of electronic market platforms for FPOs SK Mohanty, whole-time member, SEBI mentioned that price exchange platforms enable FPOs towards better bargaining power through price risk management and should be leveraged as a marketchannel for better income levels.

Mohanty elaborated on the role of derivatives market, especially the Put options tool in empowering FPOs to manage price risk of farmers and getting them optimum price benefits.

Minister also released CII NABCONS publication ‘A review of Successful Farmer Producer Organizations’. An exclusive repository of 25 successful FPOs across 15 states, the publication provides invaluable insights and recommendations on shaping the FPO ecosystem and serves as a ready reference for emerging businesses.

The report is a reference document for nascent stage and upcoming FPOs as well as has contribute to policy planning. A lot of focus in the summit was on leveraging FPOs as a vehicle for technology deployment.

Speaking on the subject at the Inaugural session, Dr G.R. Chintala, Chairman, NABARD highlighted that while production increases, productivity remains a challenge and to overcome this challenge FPOs need to leverage new technologies such as AI and Blockchain towards optimizing collectivization benefits.

Highlighting the efforts made by industry, Sanjiv Puri, Chairman, CII National Council on Agriculture and CMD ITC Ltd mentioned that CII’s FPO Business Service Unit is working towards empowering farmers through input linkage, market linkage and capacity building towards making value chains competitive, climate resilient and ensuring better qualities for better price realisation.

The sessions at the conference focused on a forward-looking approach of enabling FPOs explore alternative market channels; look at government schemes and other financing options as well as strengthen the last mile infrastructure connect.

The session on 'Leveraging FPOs to change the agri marketing landscape in India' focussed on sharing experiences of FPOs and also discussing with industry leaders avenues for addressing production related challenges by strengthening input marketing; The benefits that the various alternate output market channel offer to FPOs and also how FPOs are mainstreaming in corporate decision making for input marketing as well as procurement.

Speaking at the session, P K Swain, Additional secretary, agriculture ministry mentioned that the FPO model has the potential to enhance global trade of Indian GI products at competitive prices thus promoting exports and positioning India as a global trade leader.

The session 'FPOs as a vehicle towards financial inclusion' focused on the areas of concern in terms of financial literacy of the FPO members and the important policies and market forces for financial inclusion of the FPOs. The session also brought forth how hedging, eNWRs and other tools are scaling fintech ecosystem for FPOs.

Reiterating theneed for access to credit, Minhaj Alam, Joint Secretary, MoFPI mentioned that Enabling FPOs’ access to finance is the most critical enabler towards encouraging higher levels of value addition for agro products, which will reduce wastages and enable better farmers’ incomes.

The session 'FPOs enabling agri infrastructure & services to reach last mile' highlighted how collective requirements from FPOs are shaping the need for on farm infrastructure as well as other services. The session also brought to the forefront experiences of FPOs as well as service providers on last mile delivery models as well as policy reorientation needed if any to scale these models.

Speaking at the session, T K Manoj Kumar, Chairman WDRA, mentioned that WDRA has rationalized warehouse fee structures towards enabling viability of operations. There are around 9000 unutilized warehouses that can be leveraged by FPOs.

The last session showcased a few successful FPOs featured in the CII NABCONS publication ‘A critical study of successful Farmer producer Organization’ to help nascent stage as well as upcoming FPOs understand successful business models and draw learnings from the same in their own space.

Addressing the session, CSR Murthy, CGM, NABARD, mentioned that NABARD is dedicated to support and empower FPOs through support to credit guarantee, risk mitigation and capacity building programs at the state level towards enabling viable business enterprise.

There was a lot of rich experience sharing by FPOs in the sessions. The summit was attended by over 1000 participants, including Government, FPOs, Industry and academia.

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