Financial Viability Of FPCs Imperative For Empowering Odisha’s Women’s Collectives
Women are the backbone of agriculture. However, due to social and gender norms and institutional barriers that do not recognise them as farmers, they have limited access to productive resources like inputs (fertilisers, pesticides, quality seeds), services (extension and advisory services, training, mechanisation), market linkages and negotiating power in markets. Smallholder farming families do not have a large marketable surplus individually to benefit from economies of scale in production, processing, or marketing.
Farmer collectives are known to be an effective mechanism to overcome this challenge. Agricultural and rural co-operatives have existed for several decades now. Farmer Producer Companies (FPC) were conceived to be a new generation farmer organisation. These are registered business entities under the Indian Companies Act and operate with a sound business plan to make and share profit/benefits among its members.
There is enough evidence to demonstrate how women’s collectives have provided pathways out of poverty by facilitating access to financial and productive assets. While the potential for farmer collectives to transform the agricultural sector is enormous, they have generally exhibited low performance. These challenges are particularly pronounced for women-led enterprises as they face the additional challenges of limited asset and land ownership and hence access to credit, social norms that restrict their mobility and therefore market linkages and, the gender gaps in access to advisory services and technologies.
Scale and volume of business are critical for sustaining viable FPCs. Multi-commodity and multi-business models mean larger and more frequent transactions leading to larger capitalisation, footfall, and revenue.
International Rice Research Institute (IRRI) has been engaged in piloting different models at different scales for women’s FPC development in the state. It partnered with Access Livelihoods Consulting India in 2018 to incubate a rural women-producer enterprise with 3,000 women farmers in Kalahandi, supported by the Odisha Government. The initiative aims to double the income of women farmers and groom the next generation of rural women leaders to establish and manage agri-businesses profitably and sustainably.
Adarsha Dharmagarh Women Farmers Services Producer Company Ltd. (ADWFSPCL) operating in Dharmagarh and Kokasara blocks in Kalahandi currently, has 1751 members with a contributed share capital of Rs 17.42 lakh. Under professional management, this company is establishing micro-enterprises guided by enterprise development plans designed based on systematic assessments of business potential. The WFPC is currently involved in rice seed production, procurement, processing, certification, and marketing branded and certified rice seed along with input trading and grocery sales in their communities. They will soon be expanding to pulse and poultry production.
ADWFSPCL has not only successfully obtained seed certification from Odisha State Seed and Organic Products Certification Agency (OSSOPCA) for rice varieties (MTU-1156, Bina Dhan 11, Pooja, etc) but also established its paddy seed processing unit with an investment of Rs 15 lakh in April 2020. The unit, which employs six women and a man, can process two tons of seed per hour. The seeds are being marketed under the “Creyo” brand. The FPC obtained Rs 65 lakh loan from NABKISAN for rabi seeds procurement in 2020 and is also exploring other locally available financial institutions to mobilise funds for their FPC. This demonstrates how the FPC has successfully managed to raise the credit-worthiness of small and marginal women farmers.
During the COVID-19 pandemic, the FPC retail services supplied groceries to 2000 member and non-member households; 713 FPC members accessed inputs for the kharif 2020 crop. The FPC processed 2672 quintal of seeds in 2019-20 and made a profit of Rs 141283 from the seed business and Rs 41000 from grocery sales during 2020.
In another initiative, IRRI in collaboration with ICAR-Central Institute of Women in Agriculture (CIWA), Bhubaneswar, has supported the “Chitridora Farmer Producer Company Ltd, Kotpad” incubated by Pragati in Koraput with more than 1000 women shareholders, to establish a paddy processing unit in January 2021.
Around 3000 women are currently engaged in the production and processing of organic and aromatic rice varieties like Kalajeera, Basubhoga, Gobinda bhog, Geetanjali, Samudrabali, Lalbadshah, Dhala mali, HMT, Bina Dhan 11, and Sahbhagi dhan. The processing capacity of the rice mill is 0.5 tons/hour and is fully managed and maintained by the WPFC members. The WFPC is also planning to venture into other businesses like poultry, goat farming, and fish production soon.
The success of the FPCs depends on effective and intensive facilitation support; diversified business and services portfolio to generate the footfall needed for year-long and higher revenue; adequate paid-up capital; access to required and relevant new knowledge, technologies, information and, skills; institutional links to access services like credit and insurance and, government schemes and programs. Providing opportunities to learn from successful FPCs is also critical. Financial viability and stability are critical for the sustainable functioning of FPCs to contribute to the economic empowerment of rural women.