Joint venture

Farmers in Rajgarh provide an alternative to cooperatives by forming a company that will ease their problems of supply and marketing.

As more and more farmers become disillusioned with the cooperative system, they are looking for alternatives to address the problem areas—accessing inputs and marketing their produce. In an effort to tackle the issue, a singular initiative has been taken by the farmers in Madhya Pradesh.

More than 1,200 farmers in Rajgarh district have floated a company called the Khujner Agriculture Producer Company Ltd (KAPCL), which will produce certified seeds and sell them to shareholders at a price 10-15 lesser than the local retail shops (even after taking into account a small margin for KAPCL).

It has started by planting soybean in 65 hectares of land pooled from shareholder farmers—small and marginal farmers of the region—and will sell the seeds to about 5,000 farmers. The company has even got a seed retail sales licence number so that the extra seeds produced by the company can be sold to the non-shareholder farmers in the area.

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“The farmers are forced to buy the soybean seed at Rs 22 per kg in the local market, but the certified seeds sold by KAPCL will be priced at Rs 19 per kg, including Rs 1 per kg margin for our producer company,” said Dinesh Nagar, Chairman, KAPCL.

The KAPCL will get its seed cultivation certified by the state’s seed certification agency before planting it and after the harvest to ensure the farmers get only certified seeds of good quality, a worrisome issue till now because of the possibility of getting spurious seeds from the local retailers.

For long-term sustenance, the KAPCL has also taken licences for fertiliser retail sales, APMC trading to provide input and marketing support to its shareholders and other farmers. Presently, it has the dealership and sub-dealership of Markfed, MP Agro Industries Development Corporation, Seed Corporations and other agricultural equipment manufacturers to provide backward and forward linkages to shareholders.

“By taking up the fertiliser, pesticide, seed and agricultural equipment dealership, KAPCL will leverage the cumulative demands of its shareholders to get a better bargain for them directly from the input suppliers,” says Ravindra Pastor, project coordinator with the state Government, who looks after the rural livelihood project.

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The leverage forces the suppliers of agricultural inputs to supply directly to KAPCL, which is based in the soybean region itself. This helps the farmers reduce the burden of transport and time. KAPCL intends to cut short the long business chain involving several layers of dealers engaged in supplying material to the farmers, which led to the increased retail prices, explains Nagar. In fact, the KAPCL will also manage the agricultural produce by grading and marketing it directly, which will cut out the necessity of middlemen and merchants to deliver the procuce to the soybean oil extraction plants in the region. This, says Nagar, will result in better returns for the farmers.

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