SOIL Report 2021

Context: Recently, released State of India’s Livelihood (SOIL) Report 2021 has stated that just 1-5 % of Farmer Producer Organisations (FPOs) have received funding under central government schemes introduced to promote them in the last seven years.
About the Report

• The State of India's Livelihoods (SOIL) Report is an annual Report released by the ACCESS Developmental Services.

It is an authoritative commentary on

• Policy and programmes of the government, potential opportunities for the poor, and
• Role of the private sector and the civil society in livelihoods promotion.
• It tracks the trends and analyses the environment in the sector.

Key findings of the report

• The number of Farmer Producer Organizations (FPOs) registered as cooperatives or societies is very small.

Low Funding

• Farmer Producer Organizations (FPO) have received only 1-5 per cent funding under central government schemes.

Low grant sanctions

• Only 5 per cent of the total producer companies have been able to secure the grants.
• States which received highest number of cases are in the order: Maharashtra (144), Tamil Nadu (104) and Uttar Pradesh (96).

Under Credit Guarantee scheme

• It provides risk cover to banks that advance collateral-free loans to FPCs up to Rs 1 crore.
• Only 1 per cent of registered producer companies have been able to avail the benefits.

Under Equity Grant scheme

• Equity grants up to a maximum of Rs 15 lakh in two tranches within a period of three years since 2014.
• Only a miniscule number of FPOs have been able to secure the grants.

Under 10,000 Farmer Producer Organization Policy

• It played an important role in bringing attention to the importance of collectivising small and marginal farmers.

About Farmers Producer Organisation (FPO)

• Farmers Producer Organization is a legal entity whose members are farmers.
• Aim: To ensure a better income for the producers through an organization of their own.
• It is incorporated under the Companies Act or Co-operative Societies Act of the concerned States.
• Farmer Producer Organization is promoted under “One District One Product” to promote the specialization and better branding, marketing, processing and exports by FPO.

Small Farmers’ Agribusiness Consortium (SFAC) is providing support for promotion of FPOs.

• Aim: To enhance the farmers’ competitiveness and to increase their advantage in emerging the market opportunities.
• It is formed to leverage collectives through economies of scale in production and marketing of agricultural and allied sectors.
• It will aid in the primary producers availing the benefit of the economies of scale.
• Farmers Producers have better bargaining power in the form of bulk buyers of produce and bulk suppliers of inputs.

Activities undertaken by FPOs

• They supply seed, machinery, market linkages & fertilizers.
• They provide end-to-end support and services to the small farmers, cover technical services, marketing, processing, and others aspects of cultivation inputs.
• They engage in the process of value addition like cleaning, grading, packing, and also farm level processing facilities at a user charge basis on a reasonably cheaper rate.
• They facilitate logistics services such as storage, transportation, loading/unloading, etc. on a shared cost basis.

Implementing Agencies

• Small Farmers Agri-business Consortium (SFAC) set up by the Ministry of Agriculture, Government of India.
• National Cooperative Development Corporation (NCDC)
• National Bank for Agriculture and Rural Development (NABARD)

Central Government schemes introduced to support FPOs

Equity Grant Scheme

• It provides an amount equivalent to the equity contribution done by the members in the FPCs.
• The scheme will be addressed by the SFAC which affords the maximum amount of Rs. 10 lakhs per FPC in two payments
• Aim: To strengthen the financial base of FPOs and help them to get credit from financial institutions for the projects and working capital requirements for business development

Credit Guarantee Scheme
The Government is providing credit guarantee cover:

• ???????to accelerate the flow of institutional credit to FPOs by minimizing the risk of financial institutions for granting loans to FPOs
• to improve their financial ability to execute better business plans leading increased profits.

Formation and Promotion of 10,000 FPOs

• Formation and Promotion of 10,000 Farmer Producer Organization Policy is a Central Sector scheme.
• It provided well defined training for capacity building of FPOs including their skill development in marketing, processing and export.

PM Formalisation of Micro food processing Enterprises (PMFME) Scheme

• Launched by Ministry of Food Processing Industries (MOFPI).
• It is for providing financial, technical and business support for upgradation of existing micro food processing enterprises.
• Aim: To support Farmer Producer Organizations (FPOs), Self Help Groups (SHGs) and Producers Cooperatives along their entire value chain.

Farmer Connect Portal

• It is an initiative of Agricultural and Processed Food Products Export Development Authority (APEDA)

Aim

• To facilitate export facility by providing a platform for FPOs/FPCs, Cooperatives to connect with exporters.
• To facilitate and integrate the activities of Farmers and aggregators in the form of FPOs with Exporters through the assistance of ICT platform.