This document discusses producer organizations (POs) and their role in agricultural and rural development in Assam, India. It defines POs as independent, membership-based groups of smallholder farmers and defines their objectives. It outlines how POs can provide inputs, credit, marketing, and training services to farmers. It then discusses NABARD's financial and technical support for POs and provides examples of successful POs in Assam, including their activities and impacts, such as increased incomes, access to credit, and marketing for members. Overall, the document argues that POs are important for small farmers in Assam to collectively access services and markets and improve their economic viability.

2. TITLE OF THE STUDY:
Producer Organizations(PO)- An
effective tool for Agricultural
and rural development.
Presented by
PRABIR DATTA
2013-AMJ-57

3. To review the concept of Producer
Organization.
To explore the Role of Producer
Organizations in Agril. & rural development.
To highlight the importance of Producer
Organization.
To understand the sources of Finance and
support system for Producer Organizations.
To review few case studies.

4. INTRODUCTION
ROLE & IMPORTANTS OF POs
FINANCING & SUPPORTING OF PO
PRESENT STATUS OF PO IN ASSAM
IMPORTANCE OF PO IN ASSAAM
CASE STUDY

5. Producer’s organizations (FOs) refer to
independent, non-governmental, membership-
based rural organizations of part or fulltime self-
employed smallholders and family farmers,
pastoralists, artisanal fishers, landless people,
women, small entrepreneurs and indigenous
peoples. They range from formal groups covered by
national legislation, such as cooperatives and
national farmers unions, to looser self-help
groupings and associations (FAO, 2007).
As per the concept, farmers, who are the producers
of agricultural products, can form groups and
register themselves under the Indian Companies
Act.

6. Producers Organization viz, Producers
Company( as defined under Sec 581 A in part
IXA of Company’s Act 1956), Producers
Cooperatives, registered Farmer Federations,
MACS (Mutually aided cooperative society),
industrial cooperative societies, other
registered federations, PACS, etc. set up by
producers. (NABARD).
The year 2014 is being observed as the
“Year of Farmer Producer Organizations
(FPO)” by the Government of India.

7. It (FPO) is one of the important initiatives taken by the Department
of Agriculture and Cooperation of the Ministry of Agriculture to
mainstream the idea of promoting and strengthening member based
institutions of farmers.
As per the concept, farmers, who are the producers of agricultural
products, can form groups and register themselves under the Indian
Companies Act. These can be created both at State, cluster, and
village levels. It is aimed at engaging the farmer companies to
procure agricultural products sell of them .
Supply of inputs such as seed, fertilizer and machinery, market
linkages, training & networking and financial and technical advice are
also among the major activities of FPO. The Small Farmers’
Agribusiness Consortium (SFAC) has been nominated as a central
procurement agency to undertake price support operations under
Minimum Support Price (MSP) for pulses and oilseeds through the
FPO’s.

8. Producer organization – An update in India:
Producer Company form of cooperative entity has
been introduced in the Indian economy by virtue of the
Companies (Amendment) Act, 2002 which is effective
from February 6, 2003.
The roots of producer company form of an entity can
be traced to the recommendations of an expert
committee led by a reputed economist, Mr. Yoginder K.
Alagh. The committee was asked to frame a legislation
that would enable incorporation of cooperatives as
companies and conversion of existing cooperatives into
companies taking care to ensure that the proposed
legislation accommodated the unique elements of
cooperative business with a regulatory framework
similar to that of companies.
“Indian Organic Farmers Producer Company Limited” is
the first Farmers’ Producer Company incorporated in
the year 2004.

9. 1)In a `Producer Company', only persons
engaged in an activity connected with, or
related to, primary produce can
participate in the ownership.
2)The members have necessarily to be
primary producers.

10. The objects of producer companies shall include
one or more of the eleven items specified in the Act,
the more important of these being:
Production, harvesting, procurement, grading,
pooling, handling, marketing, selling, export of
primary produce of members or import of goods or
services for their benefit.
Processing including preserving, drying,
distilling, brewing, venting, canning and packaging
of produce of its members.
Manufacture, sale or supply of machinery,
equipment or consumables mainly to its members.

11. The Grower Associations
The User Associations
The Farmer Cooperatives
The Farmer Interest Groups (FIGs)
Commodity Interest Groups (CIGs)
The Farmers Clubs etc .

12. Producer organizations (POs) are widely heralded as
leading contributors to poverty reduction and
achievement of food security (FAO, 2010).
POs can successfully strengthen the economic position
of their members by providing agricultural inputs,
credit, processing and marketing services (Narayanan
and Gulati, 2002).
In India, the Central Government has identified farmer
producer organization as the most appropriate
institutional form around which to mobilize farmers
and build their capacity to collectively leverage their
production and marketing strength (GoI, 2013)

13. 1. Collective inputs purchase
2. Collective marketing
3. Processing
4.Increasing productivity through better
inputs
5. Increasing knowledge of farmers
6. Ensuring quality
7.Marketing assistance,
8.Technical services,
9.Saving and credit,
10.Local development

14. NABARD has created “Producers
Organization Development Fund”
An initial corpus of Rs 50 crore with a
sanctioning limit of 100 crore out of
NABARD’s profits as at the end of the
financial year 2010-11 and it will be
operational with effect from 1st April
2011.

15. NABARD will undertake the following interventions:
Financial Intervention
Capacity Building
Market Linkages
Other Areas
a) Support for preparation of DPR up to 0.5% of the
project cost or 1 lakh whichever is lower.
b) Exclusive grant support for taking forward
SHGs/farmers’ clubs/producer groups to the stage of
having a Producers Organization.

16. 1) Submission of Concept Note by Producer
Organization/ Implementing Agency for business
plan of Producer Organization.
2) Submission of Detailed Project Report by Producer
Organization/ Implementing Agency.
Guiding Principle :
 registered under any Statute of Law are
eligible.
 The activities may fall within the domain of
agriculture, allied sectors & Non Farm Sector
only.

17. The fund will be used for providing loan to carry out the
economic activity and mix of grant and loan for capacity
building market linkages.
 Community participation.
Integrated approach (need-based and flexible, convergence
with other schemes / programmes)
Pro-poor (improves employment, reduces poverty, improves
access to credit, information, entitlements)
Sources: Nabard Guidelines Producers Support

19. Given the large small and marginal land
holdings in the country in general and
particularly in Assam where in small and
marginal landholdings constitute more than
80%; the organization of producers gains
much crucial both in input management
and in marketing and finally to make the
farming a economically viable enterprise on
sustainable basis.
The organization of small and marginal
producers has been considered a basic
necessity in the current era of globalization
and WTO in the country.

20. At Assam SFAC work with producer
organizations to strengthen their
institutions and build their capacity to:
1)Access market opportunities, services
and investments they need to increase
their farm and off farm revenues, and
2)Make their voices heard in local,
national and international forum where
decisions that affect their lives are
taken.

21. Field Management Committee (FMC)
Pathar Parichalana Samitee In Assamese
Field Management Committee (FMC) is a
producer organization meant for effective
management of agriculture in a specific crop
field.
It came into operation by a resolution on
settlement of agricultural land and
reorganization by the Government of Assam in
1951.

22. Commodity interest groups (CIG)
Crop : Banana
Club Green Land Dudhnoi, Goalpara
Ten Star Banana Growers Society Vill – Singra, Kamrup
Banana Growers Society, Singra , Kamrup
Crop : Orange
Kamrup District
Organic Farmers Association Sonapur
Ma Kamakhya Society Vill. Hajobari Via. Chandrapur ADO
Circle Satgaon
Tinsukia District
Purani Motapung Patmadoi SHG
Kalpataru SHG
N.C.Hills
Sri Borai People (NGO) Haflong
Hariyali Growers Committee Langting, N.C. Hills

23. Assam Small Farmers Agri-Business Consortium(India)
Report:
In Assam now 25 no's cooperative society( producer
organization) effectively working. (SFAC Govt of India)
Legal form of PO – Cooperative society
Machinery and related infrastructure for renting – applied
under RKVY mechanization scheme .
 Credit through bank and some amount from Assam
Agricultural Competitiveness Project (AACP )
PO involved in sorting , grading 7 marketing of produce
grown by producer
Major component – paddy , potato , cabbage , mustard ,
bottle gourd, cauliflower , pulses, orange , banana , chili , fish
, milk , animal husbandry etc. Source-http://sfacindia.com/

24. Statistics of Assam
The economy of Assam continues to be predominantly
agrarian.
Agriculture sector providing employment to more than 50
percent of the rural people.(census, 2011)
The net cultivated area of the State is 28.11 lakh hectare
(2009-10)
The contribution of Agriculture sector to the State Domestic
Product was nearly 25 percent (census,2011).

25. 88%
12%
Agriculture
Other

26. 0 100 200 300 400 500
359
479
Rural
India
Rural
Assa
Self-employmentinAgriculture
Source:Employment Policy for Assam 2010

27. About 82.00 percent farmers of Assam are belongs to
category of small and marginal farmers (Source: Agril.
Census-2013).
 Average operational land holding is only 1.11 ha
(Agril. Census 2013).
Low adoption of technology is one of the several problems
confronting the small and marginal farmers due to small
land holding besides others.

28. It is widely acclaimed that the technological
knowledge generated by the agricultural research
system failed to reach-out to the actual users.
An effective rural institution has the potentiality
to close the gaps in transferring knowledge by
helping the public extension system.
Multiple production risks (biophysical as well as
socio economic), lack of market for farm produce,
and fluctuating price coexist with the problems of
delivery institutions.

29. A grass root level farmers’ organization is necessary
to drive the benefits of the schemes. In order to
sensitize the farmers to raise their voice and improve
the delivery mechanisms at the grass root level
when rural producers come together they can find
their voice and take an active role is shaping their own
pathways out of poverty.
It is no coincidence that there is a saying that goes
‘Where the production sector is strong, the
Association is strong”

30. Field Management Committee
Field Management Committee (FMC) is a producer organization
meant for effective management of agriculture in a specific crop
field. It is formed in a contiguous field where large numbers of
farmers of a village or of a locality have their land or cultivation. A
farmer can be member of more than one FMC, but he/she will be
eligible to be a member of only one executive body. It came into
operation by a resolution on settlement of agricultural land and
reorganization by the Government of Assam in 1951. FMC is a non-
government organization (NGO) registered by the District
Agricultural Officer, Department of Agriculture, Assam. The
Agricultural Development Officer (ADO) and Village Level
Extension Worker (VLEW) of the concerned area are the technical
advisers of the FMC. By 2011, the Department of Agriculture,
Government of Assam has organized about 1.8 million farmers in
25,938 FMCs (Govt. of Assam, 2012).

31. By 2012, almost 95 per cent FMCs were defunct. Therefore, it
is important to analyze the reasons for their lack of
sustainability.
Reason of poor sustainability of FMC
From field based to village based
Demarcating the field
Member contribution
Distribution of inputs without support and services
Governance of FMC
Forming groups without mobilization
Lack of capacities within extension
Lack of clarity on registration and access to funds

32. Indian Organic Farmers Producer Company Ltd. - The first
farmers' producer company.
The Indian Organic Farmer Producer Company Ltd. is an
Aluva (Kerala) company of farmers producing organic
products.
Only producers with organic certification are eligible for
membership of the company, where patronage for one share
is fixed at Rs.40,000.
Thus, the holder of one share can market his/her own
organic products worth a maximum of Rs.40,000 through
the company.

33. The company provides advice to farmers on mapping and
assessing resources (mainly soil and water), sustainable
resource utilization and scientific production methods.
 The company markets organic products after branding.
'Healthy People, Wealthy Farmer, Healthy and Wealthy
Nation' is the motto of the company.
One of the company’s future plans is attracting
environmental funds from farmer-friendly groups abroad
who are interested in supporting fair trade.
(The HINDU, Sep 23, 2004)

34. In Assam, the Spices Board under the
Ministry of Commerce, Government of India
has promoted two producer companies, the
Coinonya Farm Producer Company Limited
for turmeric and Karbi Farms Producer
Company Limited for ginger and chilly in
Karbi Anglong District of Assam under
organic cultivation for processing and
export. The spices board has put in Rs. 1
crore as equity in each of the companies,
while the rest of the equity is held by tribal
farmers, 600 in Coinonya and 400 in Karbi.

35. The Tribal Co-operative Dairy Farm and Allied Industry
Ltd. (TCDF)
 The tribal Milk Producers of Bongaigaon and Kokrajhar
districts formed a co-operative society, the tribal Co-
operative Dairy Farm and Allied Industry Ltd. (TCDF) with
head quarters at Dhaligaon on 1st. April 1980.
The society started functioning with the procurement of 101
litres of milk from the bonafide shareholders. The
shareholders are mostly agricultural labourers, small and
marginal farmers and other weaker sections of the society
including educated unemployed youth in rural areas.

36. Presently, the society is procuring 300-690
litres of milk daily.
The society is also producing and selling
milk by-products such as panir, ghee, dahi,
cream, butter, flavoured milk etc.
The TCDF provides training through
distinguished Govt. faculties especially to
women and educated unemployed youth in
various courses including scientific
Livestock and poultry rearing.

37. Apart from the dairy co-operative society the
TCDF management has also established a pork-
processing project with a processing plant at
Kishanbazar, first of its kind in the NE region. The
plant has a capacity to process 200 nos. pigs per
day with the total estimated cost of Rs. 202.58
lakhs. The total no of shareholders in this project
is 345 (Male-160 and Female-185).
(Source : Directorate of Animal Husbandry &
Veterinary, Chenikuthi, Guwahati-3)

38. Experience shows that POs represent the interest of their
members and have the potential to articulate their need
for agricultural services.
Partnering with POs would improve knowledge
promotion, adaptation and its eventual use. It also helps
extension to assess better the priorities of farmers. Many
POs need support to develop their capacities to serve
farmers better especially in promoting adoption of new
technologies, stimulate learning and develop
entrepreneurial skills.