Agriculture: Cooperative Farming

Collective push can help farmers hold firm

Cooperative farming holds relevance in the present crisis since it has the potential to address the fears and insecurities among the peasantry over the Centre’s new farm laws. With the basic principle of retaining individual ownership of one’s land, collective thinking and exit options, cooperative farming infuses capacity to deal with corporates and multinational organisations whose enhanced entry seems to be inevitable in agriculture in the near future.

Collective push can help farmers hold firm

A spectacular shift occurred in agriculture in the late 1960s, of which Punjab was the epicentre.

SS Chahal

A spectacular shift occurred in agriculture in the late 1960s, of which Punjab was the epicentre. In tune with the national slogan ‘grow more food’ and driven by higher productivity and profitability, farmers were encouraged to invest more and more to meet the input needs as well as inflated expectations. The trend continued unabated even after the symptoms of the withering of the Green Revolution started appearing, primarily due to mono-cropping, fast depletion of natural resources and consistently reducing profitability. Hefty increase in input costs of materials has led to a decline in the farm income over the years, notwithstanding the increase in the farm output. The report of the Committee on Doubling Farmers’ Income, under the chairmanship of Ashok Dalwai, CEO of National Rainfed Authority, revealed that “by and large the per-hectare real value of output increased for most crops from 2004-05 to 2013-14, but the rise in input cost was much higher than the increase in value of the output, thus lowering net income from the cultivation of most crops.”

Some recent studies have revealed significantly low level of adoption of certain farm recommendations because of unaffordable cost even by well-to-do farmers individually. Very low level adoption of management practices for paddy straw because of non-affordability of machines like happy seeder, zero till drill, RMB plough mulcher, paddy straw chopper etc. is a glaring example. Low profitability, small value realisation due to an imperfect market for input/produce, low access to credit markets, less knowledge of innovative cultivation practices and contingency situation etc. have led to farming being considered as unviable under tough circumstances.

Under similar circumstances of distress farming and vast indebtedness among farmers, cooperative farming (CF) emerged as a follow-up to Sir Frederic Nicholson’s report in 1895 in India. It was supported in independent India in the Nagpur Resolution of 1959, when it was identified as the ‘future agrarian pattern in India’. It holds relevance in the present crisis since it has the potential to address the fears and insecurities among the peasantry over the Centre’s new farm laws. With the basic principle of retaining individual ownership of one’s land, collective thinking and exit options, CF infuses capacity to deal with corporates and multinational organisations whose enhanced entry seems to be inevitable in agriculture in the near future.

About 85 per cent of the farmers are small and marginal; they lack bargaining skills. They don’t have necessary access to new technologies, latest farm machinery, credit facilities, technical know-how, quality parameters, market intelligence, post-harvesting operations and storage facilities. They are suffering from the gap between scientific know-how and field level do-how, which can be achieved through CF. Resource pooling can reduce the cost of cultivation and collective efforts can push technology adoption, favourable marketing, requirements for quality and traceability for export avenues. It can facilitate crop specialisation in clusters and pave the way for the establishment of relevant industry in the production zones, making member farmers an integral part of the supply chain. It is, therefore, required to encourage and support the formation of cooperative groups extending to supply as well as marketing cooperatives, agricultural cooperatives and commodity-based collectives to raise the confidence of farmers in farming by enhancing their income. The formation of large groups of farmers and engaging them in the production of higher quality products can fulfil the needs of many processing and marketing enterprises for processing goods for specific markets for higher returns. Cooperative organisations can raise finances from accredited agencies to save farmers from falling into the debt trap by borrowing at exorbitantly high rates of interest. Promoting self-governance, it is the best way to work as a bridge between the government and the farmers for finding solutions to many problems.

Amul success story

Among India’s cooperatives, Amul (Anand Milk Union Limited) emerged out of an agitation by marginal farmers of Kaira (Gujarat), each of whom could deliver at the most 1-2 litres of milk per day. TK Patil, a local farmer leader, persuaded them to form a cooperative which materialised as Kaira District Co-operative Milk Producers’ Union Limited in 1946. Subsequently, cooperatives were formed for each village of the district. Dairy cooperatives quickly spread to other districts of Gujarat. Under the leadership of Dr Verghese Kurien, Operation Flood made dairy farming India’s largest self-sustaining industry and the largest rural employment sector. It made India the world’s largest milk producer and doubled the milk availability per person.

Among the success stories are three Farmers’ Producer Organisations (FPOs) we got registered under the aegis of Maharana Pratap University of Agriculture and Technology, Udaipur, supported by a World Bank project in Banswara and Dungarpur districts of southern Rajasthan in 2010. Their key interventions included seed production of cotton, wheat, maize, castor, agriculture input supply, collective output marketing of grains and vegetables. The Dungarpur Agro Producer Company Limited, one of these FPOs, registered an increase in turnover from Rs. 9.5 lakh to Rs 80.2 lakh within three years. The member farmers received quality inputs at reasonable prices, enhancing their bargaining capacity as well as the average net income per farmer by 39%.

Under recently issued guidelines, the Central Government will set aside around Rs 4,496 crore for the formation and promotion of 10,000 FPOs till 2023-24 and provide financial support for another five years with an additional commitment of Rs 2,369 crore. To better promote and supervise such ventures, there is a need to establish a national-level project management agency. The establishment of a mechanism to promote farmers’ control of market channels for greater profits, a special package for creating initial infrastructure and review of policy and legal framework governing cooperatives for greater autonomy, transparency, business-like approach, motivating and mobilising farmers are required to accelerate the growth of farm cooperatives for achieving the national agenda of doubling farmers’ income and making farming an attractive option.

Farmers’ Producer Organisations

  • Farmers’ Producer Organisations (FPOs) are farmers’ collectives with membership mainly comprising small/marginal farmers (70-80%).
  • Presently, around 6,000 FPOs are in existence in the country, formed under various initiatives of the Govt of India (including the Small Farmers’ Agri-Business Consortium or SFAC), state govts, NABARD and other organisations over the past 8-10 years.
  • Of these, around 3,200 FPOs are registered as producer companies and the remaining as cooperatives/societies, etc.
  • Majority of these FPOs are in the nascent stage of operations with shareholder membership ranging from 100 to over 1,000 farmers.
  • These FPOs require not only technical handholding but also adequate capital and infrastructure facilities, including market linkages for sustaining business operations. Source: Nabard.org

The author is former VC of Maharana Pratap University of Agriculture and Technology, Udaipur

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