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Journalism of Courage
Farmer Producer Companies (FPCs) will have to pass a resolution to share their profits or dividends with their member farmers in order to participate in state government’s programmes.
Dheeraj Kumar, commissioner, agriculture, while speaking to The Indian Express, said this decision was taken after receiving complaints from farmers about NAFED procuring onions from them at lower price and selling them at much higher prices.
Last year, MahaFPC, the consortium of FPCs in the state, had participated in procurement of onion on behalf of NAFED under the Price Stabilization Fund (PSF) of the Ministry of Food, Public Distribution and Consumer Affairs. PSF is a central government scheme where the NAFED (National Agricultural Cooperative Marketing Federation of India Limited) enters the market to procure commodities at prevailing price and offloads them at a later date. This scheme is more of a consumer-centric scheme to allow access to commodities to sell at retail markets. NAFED implements the same mostly for onions in order to cool down the prices.
Kumar said that during the implementation of the scheme, his office had received complaints about NAFED’s agencies procuring onions at lower rates from farmers and selling the same to NAFED at higher rate. “There seems to be a lack of transparency in the process in terms of price discovery,” he said. MahaFPC had also implemented the first-ever onion storage and handling project under the public private partnership model, which saw the state government, NAFED and FPCs constructing scientifically designed onion holding structures where the commodity can be stored with minimum losses.
After the complaints were received, Kumar’s office wrote to NAFED as well as MahaFPC to enquire if the profit or dividends were passed on to the member farmers. “However, their reply stated that the same was not done,” he said.
In order to bring in more transparency, Kumar said his office is going to bring about changes in the manner FPCs function during execution of government processes. “For FPCs which would work under SMART project, we would insist on them passing resolutions in their general body meeting to pass on the profits to their members,” he said. Kumar also hinted that his office had also received complains about the functioning of FPCs that in many cases, the companies are sold to third parties to carry out business.
In its reply, MahaFPC had pointed out that FPCs/MahaFPC/Nafed Act provides brokerage services and that the final commodity is owned by the department of consumer affairs. Sharing of profit is not included in the scheme guidelines, it added. They, however, maintained that over the last three years, farmers have received Rs 2-3/kg over the prevailing market prices under the scheme.
