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Farmer producer organisations – Enhancing farmers share in the consumer price

Muttlur farmers are increasing their share in the consumer price by organizing themselves as producer organization. By resolving issues of trader exploitation, exploring new markets, accessing timely credit and quality inputs, these farmers are reaping benefits through commitment and collective action.

Harvesting and packing onions

Harvesting and packing onions

Most of the people in the Karasanur micro watershed area are either landless or belong to the marginal and small farmer category. The micro watershed of 500 hectares falls under the Nallavur sub watershed of Vanur block, Villupuram district, Tamil Nadu.The average rainfall in this area is about 1200 mm, lower than the district average. The soil characteristics vary from sandy loam to clay loam and about 10% of land area has alkaline problems. Various climatic factors has resulted in agriculture becoming economically unviable, leading to food, income and livelihood insecurity.

The major crops grown in the area are paddy and onion. In Karasanur and adjoining villages, onion farmers own an average landholding of 2 to 3 acres with around 250 acres land involved in production of onion. They produce a popular local variety named as “Muttlur”, originated from this village. The variety has good export and local demand due to its high pungency. Each bulb has 2-4 splits/plant and the shelf life is about 15 days. The seeds are sourced from Cuddalore district in Tamil Nadu.

Farmers immediately after harvesting onion, sell the produce to village level merchants. It is sold as soon as possible as the weight of onion reduces up to 30% if it is stored longer and also because farmers can get money immediately. The production cost is about Rs. 27,383/- per acre of which 68% is spent on labour. With an average production of 44 quintals per acre, the income derived is around Rs. 44,000.

Usually traders buy onion from the farmers immediately after harvest and sell to the wholesalers or retailers for a better price. Some of the traders also make value addition by drying, grading, sorting and storing the onion. The trader annually deals with around 100 tonnes of onion produce in the market, which shows that there is strong business relation with the farmers. The trader is also cautious about the quality of the produce because the purchasers demand an export quality produce to attract the international market. Maximum produce is exported by big traders to countries like Malaysia, Singapore, etc.

Of the total cost around 74.7% is incurred by the farmer, while the trader, wholesaler and retailer incur 6.42%, 15.12% & 3.75%. On the profit side, while the trader, wholesaler and retailer receive 18.18%, 42.76% & 21.63%, the share of the farmer is only 17.43%. While the onion farmer faces a huge risk as a primary producer, it is the wholesaler and the retailer who make good profits.

Flow of money in Onion Value Chain: Karasanur Village (per kg figures)

Adopting “Climate Smart” practices

In 2007, M.S. Swaminathan Research Foundation (MSSRF) started implementing a project “Community Managed Bio-industrial Watersheds for Sustainable use of Natural Resources and Enhanced Livelihood” in Karasanur watershed area along with five different agro-ecological sites in four states across India. The interventions on sustainable agriculture began with MSSRF facilitating formation of Farmer’s Business Groups (FBG) in each village (similar to the SHG model) to access microcredit and for easy facilitation during Farmers Field Schools.

A joint problem analysis was carried out through focus group discussions. The analysis with the farmers revealed that seed quality is poor, farmers practiced random sowing, erratic rainfall increased the incidence of pest and diseases and the produce fetched low price. The problems were ranked; solutions were discussed based on economic viability, ecological compatibility and social acceptability. The pre-production, production and post harvest processes were carried out in a Farmers Field School (FFS) approach, with joint monitoring and documentation. The field days provided opportunities for wide dissemination of knowledge gained. The lead farmers trained under ToT’s played an important role as demonstrative model farmers and in peer learning processes.

Some of the ‘climate smart’ practices adopted were use of good quality seeds, amendments based on soil health card recommendations, ridge and furrow method of cultivation, maintaining plant population of 88,000 seedlings per acre, following a spacing of 45cms X 10cms, providing adequate drainage, adopting Integrated Pest Management practices , planting early and harvesting before onset of monsoon. The village based agro meteorology center provided regular updates through the Village Knowledge Center to enable farmers take appropriate decisions. Community Climate Risk Managers (CCRM) facilitated and conducted climate literacy programmes to make the farmer understand their vulnerabilities.

The Village Resource Center (VRC) in Pilliyarkuppam village in Puducherry is connected to The Village Knowledge Center (VKC) located in Nallavur village. The space, electricity and salary of one staff for the VKC are provided by the village panchayat. The farmers and women from 10 watershed villages access the VKC on a daily basis for information on the prevailing weather, problems in crop production, various Government schemes, new knowledge on good cultivation practices and market information. The PTD farmers are all virtually connected to receive text and voice messages from the Village Resource Center (VRC) on a fortnightly basis based on the needs discussed in the FFS and the growth of the crop. Phone in programmes (face to face interactions) involving experts is done on a monthly basis.

The number of farmers who practiced onion cultivation increased from 23 farmers in 2008 to more than 400 farmers. The yields increased from 2.5 tons/acre to 4 tons/acre. Some of the farmers also harvested upto 5.5 tons/acre.

The Watershed community has demonstrated that through the adoption of scientific methods of water harvesting and efficient use, equitable sharing, climate smart agricultural practices through an institutional system, income and food security can be enhanced. The farmers have become resilient and are able to get a major share in the value chain by resolving issues of trader exploitation, exploring new markets, adopting to price volatility, accessing timely credit for inputs and quality seeds through convergence, commitment and concerted stakeholders action.

Collective marketing through Farmers Producer Organisation

Holding a bountiful harvest.
Holding a bountiful harvest.

In 2009, an informal federation of the Farmers Business Groups (FBG) was formed and a bank account was opened in the name of the federation – Nallavur Farmers Producers Organization (FPO). Around 400 small and marginal farmers (25 Farmers Business Groups) engaged in onion / paddy agribusiness activities. The FPO is being managed jointly by MSSRF and the FBG members with clear roles and responsibilities – MSSRF playing the role of knowledge service provider. The monthly meetings, purchase of inputs, marketing, financial management and monitoring is done by the Executive committee.Exposure visits to other FPO has enhanced farmers knowledge and understanding in successfully managing the company. Organising themselves as FPO has enabled farmers plan for the season, purchase inputs collectively and repay the revolving loan to a common account.

In 2011, a marketing committee was formed, which was responsible for dealing with the traders and marketing of produce. The farmers received updated information on the prices of onion through the Village Knowledge Center (VKC) from the neighboring markets and from Chennai. It was a very challenging task as many of the farmers were already in long-term traditional contractual agreements with the local traders. Through the FPO, farmers were able to demand fair trade practices – price, correct measurements, logistics support at Rs. 1200 per bag at the export price at Chennai and Rs. 850 locally.

In 2012, with neighboring village farmers joining the FPO, the farmers committee decided to tap the export market at Chennai and were able to get Rs. 1700/bag against the local rates of Rs. 900/bag. Thus, the horizontal linkages of farmer’s also motivated them to collectively purchase inputs and seeds. The FPO also have plans for the future. They plan to construct a drying, grading and storage place for adding value to their produce and thereby receive better price.

Acknowledgements: We thank the Nallavur watershed community for their cooperation and commitment in the transforming process. The financial support from the Jamsetji Tata Trust, Mumbai is gratefully acknowledged. The overall guidance provided by the Executive Director of M.S. Swaminathan Research Foundation is appreciated.

P Nandeesa, R Sanjeev and R S S Hopper

P Nandeesa
Project Coordinator, Bioindustrial Watershed Project, Villupuram, M.S.Swaminathan Research Foundation, 3rd cross Street, Taramani Institutional Area Chennai – 600 0113
E-mail: nandeeshcp@gmail.com