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Power of collectives

Farmers like Jeevanbhai in Kansloliya benefitted by marketing groundnut through FPC

With an inclusive, sustainable and scalable model of value chain, farmers in Gujarat have come a long way in realising the power of collectives. Through direct engagement in the market space, farmers gained a competitive edge by exercising their power of negotiation.

Kansloliya, a panchayat village of Jasdan taluk, is located in Rajkot district of Gujarat. Inhabited largely by Koli Patel community, it is home to 372 families who rely on agriculture for their living. Being a dry land, water stress caused due to erratic rainfall or drought, greatly impacts agricultural production. In addition, dilapidated condition of water harvesting structures further exacerbates the situation, eroding the top soil without replenishing the ground water table. The only source of relief to the village is the pipeline water from Narmada, which is insufficient in meeting the needs of people. Lower agriculture productivity has also impacted animal husbandry, leaving no option for the villagers except to seasonally migrate in search of wage labour.

Reliance Foundation (RF) which strongly believes in achieving inclusive and sustainable development through the strength of Farmer Collectives, entered the village in 2013. Initially, efforts were made to understand the context. They experienced a lot of resistance from the Village Sarpanch, who distanced the real needy from any developmental discussions. Sustained efforts were made with door to door mobilization to reach out to the people especially the poor and marginalized sections of the community. Finally, people started coming together to discuss their needs and roles in development. In December 2013, the villagers organized themselves to form the VA named Kansloliya Gram Vikas Mandal.

Inclusion of groundnut in cropping system enhanced the availability of fodder too

Water- fulcrum of development

Initial discussion of VA members made it evident that availability of water, both for agriculture and domestic use is pivotal to success in farming enterprise. This resulted in construction of an earthen dam named ‘Buta Gala’, to arrest and harvest rain water, in 2014. Members contributed in cash and labour. The results were seen within an year. Buta Gala harvested 90000 cubic meter of water, directly impacting 14 wells by improving water table. The harvested water could support irrigation on 14 hectares of land during Rabi season. The participatory process of planning and implementation by the community in construction of ‘Buta Gala’ raised their confidence and stood as an example towards transformation of Kansloliya.

The VA members took stock of the water scenario and systematically plugged the gap in water needs. Series of water harvesting structures were created and repaired that changed the scenario with substantial increase in area under irrigation from 6% to 26%. Simultaneously efforts were made to regulate the usage and governance of water.  Drip irrigation systems were promoted especially in  groundnut and vegetables. In a short span of 4 years, area under drip irrigation expanded from 13% to 31% and the number of farmers using drip systems increased from 17% to 41%. The use of water efficient devices helped farmers to increase the number of irrigations with the available water. Even in drought conditions, farmers were able to harvest their crops with good production.

The enriched platter

With the critical input water getting stabilized, all efforts were made towards improving the basic productivity of the lands. Sustainable agriculture practices like farm bunds, mixed cropping, use of tank silt and Farm Yard Manure (FYM) were adopted by the community. Gradually there was a shift from monocropping of cotton to multiple cropping patterns. Compared to previous years, 2013 saw a jump in groundnut production to 30% and cotton crop production dropped by 5%.Groundnut crops additionally improved the fodder availability for cattle that boosted the dairy business. The quality and number of milch animals saw a big jump, generating extra income from sale of milk, thereby changing the social fabric of village. Ensured irrigation in Rabi season enabled farmers to grow two crops, thereby reducing migration.

Around 1600 more farmers from Kansloliya and 16 more neighbouring villages are now exploring avenues to sell some of the produce in the market for better price. All shared the same heart-warming story of turn-around in agriculture with bumper groundnut production. However, they also had a common challenge of getting remunerative price for their produce. They were selling the produce to the middle men, who grossly reduced the value of the produce, citing it as poor quality. Farmers were left with the option of either compromising for the lower price being offered or bear the exorbitant transportation cost to market the produce at APMC, where small quantities limited the power of price negotiation. Thus emerged the need for a Farmer Producer Company.

Evolution of Saurashtra Swanirbhar Farmers Producers Company

Collective need for getting the right value for their produce brought the famers together. After the initial concept seeding on FPC, a small group of 12 farmers travelled across the country visiting different farmers’ collective initiatives to understand the dynamics of market negotiations. Post visit, this group rallied across villages to raise awareness of farmers. This resulted in raising a share capital of Rs. 11.28 lakhs by 991 farmers to form an FPC in 2016. To gain first-hand experience, farmers collectively marketed cluster bean, which served as a learning ground on how to plan, aggregate, analyse business potentials and market as an FPC.

Based on the experience and the role of initial promoters, five members – 2 women and 3 men were selected as Board of Directors (BoDs). They finalised constitution and operational framework of FPC which later got materialised with incorporation of Saurashtra Swanirbhar Farmers Producers Company Limited (SSFPCL) on 1 August 2016. BoDs came up with business plan of the company that mainly focused on collective aggregation of groundnut and input supply at farmer door steps as primary focus. Series of meetings were organized in VAs to raise awareness among members on business plan and its governance structure. Meanwhile, SSFPCL acquired trading licence and hired a shop for sale of inputs. In collaboration with Gujarat Narmada Valley Fertilizers Company, SSFPCL helped member farmers realise better prices for six metric tonnes of neem seeds. Simultaneously, BODs also initiated talks for licence with Agricultural Produce Market Committee (APMC), Jasdan.  Thus, began the confident journey of FPC with an aim to provide a just and transparent market to the produce grown by the farmers.

Expanding the horizons

Having decided to aggregate and sell groundnuts, FPC sought the support of local administration and people’s representatives to establish procurement center of National Agriculture Cooperative Marketing Federation of India Ltd. (NAFED) in their village. Since, NAFED procures produce only from co-operatives, SSFPCL entered into a partnership with Gujarat Agribusiness Consortium Producer Company Limited (GUJPRO) – a nodal agency of NAFED to establish an aggregation and distribution centre. Meanwhile, there was a declaration by Government of Gujarat to purchase groundnut at MSP through Gujarat State Cooperative Cotton Federation Limited (GUJCOT) – a state level cooperative federation. In order to accelerate the scope and depth of engagement with farmers, SSFPCL collaborated with GUJCOT. As a result, FPC became a nodal agency for its 3 groundnut collection centres under state level agencies i.e. GUJCOT & GUJPRO. The operational process implemented is as follows:

SSFPCL served 168 villages reaching 5786 farmers with groundnut transaction worth Rs. 54 crores. In the process, the average price realisation grew from Rs. 3500/quintal (in local market) to Rs. 4500/quintal. Along with price benefit, the famers were also saved from additional transportation cost with the collection centres being located in their village periphery. Direct online payments into their accounts resulted in hassle free transactions.

What distinguishes SSFPCL from many Producer Companies is its strong community presence in village institutions and collaborative efforts with relevant stakeholders in ensuring MSP to the farmers. One of the members, Chhaganbhai Metaliya of the Saurastra Swanirbhar Farmers Producer Company says, ‘I was hesitant to join Farmer Producer Company, since I wasn’t sure if it would suit my business methods. But I took a leap of faith, and now, when I see farmers from other villages joining the company to sell their produce, I feel reassured. I am happy and proud to be a member of a company that helps farmers sell their produce at better rates – each member farmer has been able to increase his or her profit by at least Rs.10,000! This is no less than a miracle.’

In just 2 years, SSFPCL has benefited 66 farmers in Kansloliya with over Rs. 2 lakh as additional income due to collective marketing of agricultural produce and availability of farm inputs like –seeds, fertilisers, irrigation equipment, soil testing services etc., at competitive rates. Besides this, 6 farmers earned additional income of Rs.56,000 in 3 months by working in collection centres.  There has been rise in assets like motor pump, electrification, well deepening, drip systems, pipelines, pucca houses, cattle etc. Synergising with Gram panchayat, Kansloliya VA is gradually marching towards holistic development.

Collection centers at the village periphery made marketing much easier for the groundnut farmers

Like Kansloliya, RF is working in 550 villages across 12 states of India, providing direct support to more than 60,000 households. The strategy of localising this large scale intervention has enabled every single farmer household to enjoy the impact. Today, there are 19 FPCs supported by RF, with an equity of Rs. 228 lakhs contributed by marginal farmers in 10 Indian states serving 35,000 rural families in more than 500 villages.  Knowledge on commodity future trading has helped farmers use new age market platforms for better price realisation. Besides price negotiations, the FPC have collaborated with many departments, agencies and NGOs to support farmers on soil health, seeds, seasonal information, price trends, storage etc. This has empowered farmers by bringing out the entrepreneurial abilities, reduced post-harvest losses and securing their income.

Conclusion

Empowering farming communities by providing end to end solution i.e., farm to market can change the face of agriculture. Impact created through RF in transforming Kansloliya village or raising hope of Jivanbhai with ensured water and sustainable farming or giving the power of production and market negotiation in the hands of its farmers through Jasdan FPC is a testimony to it. Market linkages through Farmer Producer Companies (FPCs) has provided economic self-reliance to producers by safeguarding them against price fluctuations, ensuring quality of produce, improving their negotiation power and enhancing their skills.

Jasbir Sandhu
Reliance Foundation
Project Office, First Floor
Thane- Belapur Road, Ghansoli,
Navi Mumbai- 400701
Email: Jasbir.Sandhu@reliancefoundation.org