Market linkage could boost farmers' turnover by 5-20%: Tata Trusts study

The report was based on a field study concluded over a year ago, covering 49 FPO clusters and 45 agriculture value chains across 52 districts in 18 states

A recent survey on Farmer Producers Organisations (FPOs) by Tata Trusts suggested that to ensure higher returns for farm produce, “FPOs need to increase market linkages”. The report recommends addressing the concerns of agricultural value chains such as availability of infrastructure and credit, information asymmetry and value addition. These issues assume importance after the government allowed farmers to directly sell their produce to processors and traders, obviating the need for them to bring their produce to APMCs or market yards.

The survey found out gaps in the way these FPOs are handling their operations and the available infrastructure. “If the gaps are addressed through effective linkages, each of the clusters could see an increase in aggregate turnover increasing by 5-20 per cent, depending on the crop,” said the survey result.

The report was based on a field study concluded over a year ago. The study covered 49 FPO clusters and 45 agriculture value chains across 52 districts in 18 states. This was followed by an intensive analysis of the data, and discussions with market players and other stakeholders. The report is further backed by 49 FPO cluster-level reports that span 1,800 FPOs and 399 market players, says Pradyuman Singh Rawat, Project lead, Tata Trusts.

Key focus areas impending such market linkages were grouped under organisation- and capability-related issues, as well as technology-related, financial and infrastructure-related and Marketing related areas.

The study has further recommended nine priority clusters for Centres of Excellence in Agricultural Marketing and Development (CEAD)-related interventions, including Amravati, Nagpur, Tehri, Dahod, Chittoor, Kolar, Tumkur, Nashik, Mayurbhanj and Kamrup.

For instance, in Amravati and Nagpur region of Maharashtra, the study found the need to establish sorting/ grading units for oranges to enable farmers to sell their produce to alternate market players. It also observed that in these regions, farmers needed more knowledge about crop parameters -- such as low damage percentage, low moisture content – for soybean production, enabling them to sell to alternate markets at a better price.

The study has recommended that by providing small transportable graders and large mechanical graders to FPOs for grading of oranges, FPOs would be able to sell outside APMCs.

Similarly, in Tehri district of Uttarakhand, the study found the need to aggregate vegetables better at the FPO level, minimise dependence on local traders, and mitigate high cost of transportation for the farmers. To do this, it recommended improving capacity utilisation using digital technologies, and improving returns by organic certification and creating a separate brand for the region’s produces.

Pointers

• Of the 1,833 FPOs surveyed, only 750 were found to be active
• Of the active FPOs, only 47% had business revenues, and only 42% had a GST registration
• 750 FPOs surveyed had 360,000 farmers as members, with an average land holding of 1.02 Ha
• FPOs represented 1.47% of total gross cropped area of the geographies contributing to 2.3% of the total production of key value chains in these geographies
• Of the 49 clusters, there were nine in which the aggregate turnover of FPOs was more than Rs 5 crore; between Rs 1-5 crore in 18 clusters; and less than Rs 1 crore in about 14 clusters.
• Within a cluster, at an FPO level, the average turnover was Rs 23 lakh in 2016, and Rs 20 lakh in 2015