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Amid farm law protests, Maharashtra FPCs look to increase their non-MSP operations

Thanks to their grass root level organization and reach, FPCs, especially those in Latur, Osmanbad, and other pulses and oilseed producing districts of the state, have access to assured supply of both.

Written by Parthasarathi Biswas | Pune |
Updated: February 2, 2021 4:48:56 pm
FPCs, especially in the pulses and oilseed heartland of Latur, are increasingly evolving models which sees them tying up with processors like dal millers or oil extractors in the region. (File)

Even as farmers from Punjab and Haryana continue their agitation for the preservation of the government-run Minimum Support Price (MSP) procurement and oppose the three farm laws, the farmers producers companies (FPCs) in Maharashtra seem determined to diversify their business away from the MSP operations.

FPCs, especially in the pulses and oilseed heartland of Latur, are increasingly evolving models that see them tying up with processors like dal millers or oil extractors in the region. This model, they feel, will help them in creating sustainable business models.

MahaFPC — the umbrella body of FPCs in the state — has been recognised as a state-level agency to participate in government-run procurement programs. Under such operations, agencies like the National Agricultural Cooperative Marketing Federation procures commodities like soyabean, pulses, etc., from farmers when their prices in wholesale markets fall below their MSP. Member FPCs start such operations at the village level which becomes a bonus for their farmer members.

While MSP operations continue to be an important component for MahaFPC, non-MSP operations have now started taking off. Yogesh Thorat, managing director of MahaFPC, said they are asking their member FPCs to develop such value chain.

Located in the village of Takli in Latur district’s teshil by the same name, Vikas Agro FPC has over the last two years or so trying to consciously diversify into private trade. Vilas Uphade, director of the company, pointed out how they are located in the pulses and soyabean heartland of India. “Dal millers and solvent extractors dot the landscape and require constant supply of pulses like tur, chana or oilseeds like soyabean for year-round operations. We have entered into agreements with them to supply graded and sorted commodities at their gate,” he said

Thanks to their grass root level organization and reach, FPCs, especially those in Latur, Osmanbad, and other pulses and oilseed producing districts of the state, have access to assured supply of both. For FPCs like Vikas Agro, another advantage is the presence of warehousing space and primary level value addition like grading, separating, and bagging helps them to deal with processors directly. “Unlike the Latur’s wholesale market, we are in a better position to supply value-added produce. Thus processors who deal with us save on that cost,” Uphade said.

In the last fiscal, as against government business of Rs 13 crores, Vikas Agro had registered Rs 10 crores of private business.

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The three agri laws, which have become the bone of contention between the protesting farmers and the government had in fact allowed the FPCs leverage their position better. The laws, especially the Farmers Produce Trade and Commerce (Promotion and Facilitation) Act has allowed them to directly procure from their farmers without having to pay a market cess to the wholesale markets. Thus till date they have provided around 20,000 tonnes of soyabean to various expellers to the tune of Rs 150 crores. “Its win-win for both of us- the shareholder farmers get to offload their produce at the village level, while the companies get to buy without having to pay market cess,” said Thorat. FPCs, Thorat said have also started supplying onions to companies like Ninjacart and a host of other supermarkets.

“Our main advantage is that we have access to primary producers. Thanks to the MSP operations we have managed to create a value chain which we now want to expand for non MSP operations also,” he said.

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