This document provides an overview of farmer producer companies (FPC) in India. It discusses what an FPC is, their importance for farmers, past and current attempts to organize farmers into groups, the key features of FPCs according to the Companies Act of 2002, and the eligibility criteria and registration process. It also outlines some of the services FPCs can provide, benefits they offer farmers, management structure, challenges faced by FPCs, and a case study of an FPC in Dharmapuri, Tamil Nadu.

1. Farmer Producer Company
Presented by:
MANJUPRAKASH
TNAU, Coimbatore
An overview

2.  Introduction
 Importance
 Problems
 Key features
 Attempts (Past & Present)
 Vision and mission
 Companies Act 2002
 Eligibility Criteria
 Registration procedure
 Challenges
 Visit to FPC
 News paper clippings
 Conclusion
Outline of seminar

3. Introduction

4.  Farmer producer company is a
legal entity form of a company
 Its hybrid between cooperative
societies and private limited
companies
 Formed and operated by farmers
- SFAC, (2014 )
Farmer Producer Company

5. Non producing members

6. History of FPC
 PCs were tried in Sri Lanka in 1990s
 They called it as farmers companies
 Concept of FPC introduced in 2002 as recommended by expert
committee led by Y. K. Alagh
 In the mid of 2011 there were about 156 PCs in India
Sukhpal Singh and Tanurvin Singh (2013)

7. Current status of FPCs
 As on 2015 there were 759 FPCs in India
 In Tamil Nadu there are 62 FPCs
 Karnataka has 74 FPCs
SFAC, (2015)

8. Production
Harvesting
Procurement
Grading
Value
addition
Import &
Export
Supply of
inputs
Insurance
Storage
Marketing
Nageswara Rao et al., (2015)
Objectives

9. “Farmers' organisations should be promoted to combine the advantages or
decentralised production and centralised services, post-harvest
management, value addition and marketing.”
- National Commission on Farmers (2004)

11. Problem faced by the farmers in India
Delay in the dissemination of information and
obtaining feedback from farmers
Non availability and timely supply of agricultural
inputs
Non availability of labours and costly wages
Market issue like price variation
Exploitation by middlemen
Climate change

12. Linkages
FORWARD
Insurance
Market
Value addition
BACKWARD
Input
Credit
Technology

13. Key Features of Producer Companies
Members equity cannot be publicly traded but can only be
transferred
Corporate body registered under Indian Companies Act 2002
Minimum members - 10
Ownership and membership held only by Primary producers
or Producer Institution

14. Key features cont.,
Liability of PC is limited to the value of the share capital it
has issued
Minimum authorized capital at the time of incorporation –
Rs.5 lakh
Members liability limited to the value of share capital held
by them
Area of operation of PC can be the entire country

15. Services Provided by PCs
Input supply Credit Agro-advisory
Procurement Market support Warehousing Processing, value addition
ExportCertification Research linkageTraining and development

16. Benefits of Producer Companies
 Better way for organizing poor producers.
 Consistency in quality and regularity in supply to the corporate buyers
facilitates entry into long term contract.
 Overcome the problem of Dormant membership.
 Greater bargaining power in the market.
 Aggregate demand for inputs of producer-members enables them to
purchase in bulk.
www.alcindia.org

17. During 1970’s India has
introduced “Dairy
Cooperatives”
60 per cent of the milk
produced in the country
sold through organised
milk producer
cooperatives
Provides supplementary
income to over 70 per
cent of rural and urban
households
Previous attempts to organise farmers
into group

18. Current Attempts to organise farmers in India

19. Support schemes
Institutions Schemes
SFAC
 Credit Guarantee Fund to mitigate credit risks.
 Matching equity grant up to Rs. 10 lakh.
NABARD
 Producers Organization Development Fund (PODF)
 Contribution towards share capital on matching basis, up to 25 lakh
per PO with a cap of Rs 25,000 per member
 Credit support for business operations
 Support for capacity building program

20. Vision
To enhance productivity through efficient,
cost-effective and sustainable resource use.
To build a prosperous and sustainable
agriculture sector.
To realize higher returns for produce.

21. Mission
To promote economically viable,
democratic, and self governing FPCs.
To provide support with the help of
qualified and experienced RIs.
To create an conducive environment for
investments in FPCs.
To remove hurdles in marketing access.

22. The companies (Amendment) Act, 2002
Producer Company means a body corporate having objects or
activities specified in the section 581B and registered as Producer Company
under this Act
www.mca.gov.in

23. 2
NABARD (2014)

24. Registration Only persons engaged in an activity connected with,
primary produce can participate in the ownership
Termed as “Companies with Limited Liability” and the
liability of the members will be limited to the amountThe
members have necessarily to be primary producers.
A producer company can be registered
under the Companies Act, 1956.
Registration
Sukhpal singh (2008)

25. Share Capital
• Share capital of a Producer Company shall consist of equity shares only
• Members' equity cannot be publicly traded but only transferred
• Voting
Anish, (2011).

26. Management
 Every producer company is to have at least five and not more
than 15 directors.
 A full time chief executive should be appointed by the board and
shall be entrusted with substantial powers of management as the
board may determine.
Murray, (2010)

27. Audit
Anish. M, (2011)
 Producer Companies shall carry
out - internal audit
 The auditor make annual audit
report
 Audit shall be carried by-
Chartered Accountant.

28. Key difference between producer
company and cooperatives
Mondal, (2009)
PARAMETERS COOPERATIVE PRODUCER COMPANY
Registration Cooperative Societies Act Indian Companies Act
Objective Single object Multi-object
Area of operation Restricted Not restricted
Membership Individuals Individuals, groups/association
Share Non-tradable Non-tradable but transferable
Profit sharing Limited dividends Commensurate with volume of
business
Voting rights One member one vote One member one vote
Reserves Created if there are profits Mandatory (every year)
Autonomy Limited Fully autonomous, self-ruled
Government
control
High Minimal
Borrowing power Restricted More freedom and alternatives

29. Challenges
 Organizing producers
 Hiring and retaining staff
 Raising capital including working capital
 Increasing the capacity of staff and board members
 Providing effective agriculture extension services to farmers
 Value addition and marketing

30. Dharmapuri Small Farmers Minor Millet Producers
Company
“Motto”
 Supply of healthy food
 To help farmers to market their produce

31. Evolution of the Company
 Started in 2013
 Registered in 2014
 Total members 1021

32. Crops

33. 1 Managing
Director
1 CEO
10 Directors
5 Discussion
Penalty
1 B.Sc., Agri.
Graduate
Farmer members
Organisational Setup

34. Price Fixation of the Produce
Bangalore Chennai Coimbatore
Market
price

35. Service to the members
Training
Marketing
Technology
Exposure visit
Seeds
Value addition

36. Brand of the company

37. Facebook page of D-Millets

38. Future plans
 Supply of Cut Fruits
 Millet Bakery Items
 Millet Noodles
 Millet Cookies
 Mixed Millet Malt

39. Award

40. Constraints
 Mobilisation of members
 Lack of government support
 Difficulty in management

41. Education is to be given on those crops like Paddy,
vegetables and minor millets
that are native to the region to effect production

43. Interaction with FPC members

46. Conclusion
 PROMOTE PRODUCER COMPANIES; HELP TO
IMPROVE FARMERS’ WELFARE
 PATHWAY TO LINK FARMERS TO VALUE CHAIN

47. References
• Ashish, M. (2011). An overview of producers companies. Retrieved on 05, October,
2016 from rna-cs.com/pdf/Producer%20Companies.pdf
• Murray, E. V. (2010). Producer Company Model-Current Status and Future
Outlook: Opportunities for Bank Finance Retrieved on 22, October, 2016 from
www.kvic.org.in/update/KRDP/Producer%20Company%20Model.pdf
• Sukhpal Singh. (2008). Producer Companies as New Generation Cooperatives.
Retrieved on 2, November, 2016 from http://www.aofcindia.org/articles.php
• D. Nageswara Rao, U.D. Shirsalkar, Jaideep Srivastava, R.K. Srivastava,
Maheshwar Sahoo, G.S. Rawat and K.I. Shariff. (2013) Policy & Process
Guidelines for Farmer Producer Organisations. Retrieved on 15, October, 2016 from
nhm.nic.in/Archive/FPO-Policy&Process-GuidelinesDAC2013.pdf