A YEAR after the central government announced a five-year income tax holiday for the farmers producer companies (FPC), business is yet to pick up for most of them. Of the 237 FPCs associated with the MAHAFPC — the apex body of FPCs in Maharashtra — only 40 per cent are active in agri-business initiatives.
Registered under the Companies Act, FPCs are village-level enterprises formed by farmers and are projected as a better alternative to cooperative bodies. The FPCs allow farmers the bargaining power to seek better prices for their produce.
In Maharashtra, FPCs are mostly involved in the trading of soya bean, maize and onion.
Records with the MAHAFPC show that the year 2016-17 was perhaps the best in terms of turnover.
Empowered by the state government to take part in the procurement under price support fund (PSF), 149 FPCs had taken part in the process and had reported a turnover of Rs 167 crore. The MAHAFPC had asked for inclusion in the subsequent years’ price support scheme (PSS). However, the state government did not agree.
In 2017-18, FPCs reported a turnover of Rs 9 crore after taking part in market linkages for soya bean and maize. “As many as 21 FPCs had handled 2,746 tonne of soya bean and 1,949 tonne of maize that year,” said Yogesh Thorat, managing director of MAHAFPC.
This year, 25 FPCs handled the onion procurement operations of the central government and the total turnover of the operations was slated to be Rs 7.5 crore. “Apart from this, 12 FPCs are engaged in interstate trade of onion and have a turnover of Rs 1.47 crore. Also, 12 FPCs are linked to soy bean processors for supply of raw seed and sold 468.27 MT of soybean worth Rs 1.55 crore,” added Thorat. As many as 100 FPCs are engaged in seed production and providing agriculture inputs, among other activities.
As figures show, the FPCs are still finding their way in the world of commodity trade but the tax holiday has certainly come at an opportune moment. “It was a great relief to the farmers’ institutions. Also, this decision paves the way towards incentivising FPCs,” said Thorat.
He added that he was hopeful that this year’s Budget will pay attention to the convergence of FPCs in value chain activities.