Great Expectations: Setting the Context for Farmer Producer Organisations (FPO)

FPO stocks are trading high in the marketplace of hope. How do we make sense of this promise without losing touch with ground realities? I speak to FPO Expert Dr. Venkatesh Tagat to find out.

A lot of attention is being lavished currently in India on the promise of Farmer Producer Organisations - the intrepid love child of private companies and cooperative societies. So much that Spiritual Gurus like Sadhguru Jaggi Vasudev (SJV) are now talking about it. And if you know anything about how urban India works (mind you, we are not talking about rural Bharat), that’s a big deal of attention.

In one talk addressed to agricultural students, SJV had this to say to beaming young minds and bright eyes filled with promise.

“Young people can go out and form “Farmer Producer Organisations” and aggregate 1000, 2000, 10,000 farmers, depending on your capacity. And if you aggregate irrigation and marketing, and the farmer just does farming, you will make a miracle happen in this country.”

Going by the amount of public money that is being diverted for FPOs, one thing is for sure. A lot are betting on this collectivization-of-farming miracle to happen.

The central government recently launched a new scheme "Formation and Promotion of Farmer Producer Organisations (FPOs)" to set up 10,000 new FPOs with budgetary support of ? 6,865 crore INR from FY20 to FY28. And more recently, as per the new operating guidelines, the government announced that they will provide financial support of up to ?18 lakh INR to new organizations for the first three years.

While critics have argued that such grandiose plans are bound to fail without adequate funding reforms that take into account the time it takes for FPOs to grow and mature, I don’t see several fundamental questions being asked in our rush to bet on FPOs.

How do we make sense of FPOs as it is imagined in the rose-tinted world of optimism AND as it is in the real world where the rubber meets the road?

This is a vast topic, and I plan to cover FPO in greater depth.

To set the ball rolling, I want to begin with an interview I did with Venkatesh Tagat few moons ago. Special thanks to Emmanuel Murray for introducing me to Venkatesh Tagat.

Venkatesh’s deep immersion and vast experience in this space are extremely useful to set the context for our future exploration on this hairy topic.

And mind you, this is a topic that is not just relevant in an Indian context.

Even in countries like China, the rise of youtube stars like Li Ziqi clearly point towards the vision of the People’s Republic of China to encourage millennials to leave overcrowded cities and go back to their native villages and start farmer cooperatives, leveraging the power of the technology they know at the back of their hand.

Now please allow me to introduce our guest.

Venkatesh Tagat is an independent consultant and wears many hats. He currently sits on the Board of Samunnati as an Independent Director.

He has had a fascinating journey in Agriculture.

Starting from a research career with Coffee Board in Karnataka, he got recruited by the Reserve Bank of India, joined NABARD [National Bank for Agriculture and Rural Development] in its early halcyon days 35 years ago, and before his retirement, was actively involved in enabling credit for Farmer Collectives: Co-operative Society, Farmer Producer Organisation, Farmer Producer Company, Mutually Aided Co-operative Society [in states like Andhra Pradesh that have passed a liberal co-operative law on the principles of mutuality).

Now whichever institutional model route we take [and we will explore the trade-offs for each route at some point in the future], the core objectives for farmers to set up Farmer Collectives are simple and straightforward.

• Can farmers get access to inputs at a cheaper cost?
• Can farmers get support for marketing?
• Can farmers get a “little better price”[In Venkatesh’s words] for their produce?

What drew me into this conversation were precisely these words of cautious optimism from Venkatesh. And I began this conversation from there.

Edited excerpts from the interview.

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