On August 28, Shivaji More and other directors of the Ramling Farmers Producer Company (FPC) in the village of Wadzire in Ahmednagar’s Parner taluka heaved a sigh of relief as the 113 tonnes of onion they had procured on behalf of the central government left for the Azadpur Mandi in New Delhi. This was the first time their FPC had ventured into government procurement. As a result, their farmers saved on the transport cost – instead of taking their produce to the wholesale market they sold it at the farm gate – and yet received better remuneration.
For a long time, it has been argued that FPCs can improve the returns farmers get for their produce while possibly reducing the prices that consumers pay for the final product. FPCs are village level companies registered under the Companies Act. The central government had announced a five-year tax holiday for FPCs in the 2018-19 Union Budget with the hope that these bodies would allow farmers to earn more. FPCs work on the principle of aggregation and improve the bargaining power of farmers both in the wholesale markets as well as in the market of inputs such as fertilisers and seeds.
Ramling FPC is not the only one that has been active this year. Of the 30,000 tonnes of onion that the National Cooperative Agricultural Marketing Federation (Nafed) has been offloading in the past few weeks to cool down onion prices, about 25,000 tonnes has been produced through MahaFPC, the apex body for village level FPCs in the state.
The procurement process started on April 4 with 39 FPCs spread across seven districts in Maharashtra. A total of 3,456 farmers sold around 25,000 tonnes of onion with the total purchase value pegged at around Rs 30 crore. Price discovery was done by taking into consideration the nearby mandi prices. “Generally our prices were Rs 2- Rs 3 per kg higher than the prevalent prices, and farmers saved on transport costs as well. Thus, the FPCs managed to attract procurement from their members,” says Yogesh Thorat, Managing Director of MahaFPC. The processing and handling charges were paid to the FPC and MahaFPC by Nafed.
What further saved costs for farmers was the facility to store onions in the fields itself in the dust- and moisture-proof storage structures (popularly known as kanda chawls). What’s more, the sorting and grading of onions is done before they are stored. Further, since the chawls are geo-tagged, once the produce was weighed and stored, the FPC electronically submitted their bills to MahaFPC, which, in turn, forwarded the details to Nafed. Final payments were made directly into the bank accounts of the farmers by the FPCs. Farmers were asked to submit their land, bank and Aadhaar details to streamline the process.