Agri Business

FPOs should adopt two-level processing model, says co-op leader

AJ Vinayak Mangaluru | Updated on February 21, 2020 Published on February 21, 2020

Produce has to be processed for farmer to benefit, says Sahakar Bharati’s Satish Marathe

Sahakar Bharati, an organisation that seeks to promote the cooperative movement, has suggested a two-level processing model — on the lines of milk cooperative unions — to promote farmer producers organisations (FPOs) in the country.

In an interaction with BusinessLine here, Satish Marathe, founder-member of Sahakar Bharati and RBI Central Board Director, said the government recently decided to allocate ₹6,865 crore to set up 10,000 FPOs over the next few years.

Terming the decision a positive development to take FPO formation forward, he said the farmer is not going to benefit unless the produce, including fruits and vegetables, is processed. The shelf-life of the produce increases only when it is processed, and there is no requirement of distress sale, he added.

Milk cooperative model

Stating that all FPOs cannot make the final product, he said there would have to be two-level processing. He cited the model adopted by milk cooperatives in rural areas, which collect milk, encourage farmers to increase the number of milch animals, provide them with animal feed, and offer veterinary services. As a result, milk procurement increases in the region, he said, adding that the milk thus collected goes to a district union, where it gets processed.

“Likewise, we have to create a mechanism in the FPO business also, where there is primary processing and a final product that gets marketed. Initially, we should focus on local resources and the local market. We don’t have to create an all-India market to begin with,” he said.

Price fluctuations

Referring to the price fluctuations in thee commodities — tomato, potato and onion — he said these are very costly at times and very cheap at others. There is a huge wastage due to various reasons, he added.

Taking the example of tomatoes, he suggested that the primary FPOs convert them into puree. At the village level, the FPOs may not be able to get the required expertise to convert puree into ketchup. A secondary FPO can take up the task, and market the product as well, he added.

“As Sahakar Bharati (member) I will write to the government that we are happy with the scheme they have announced, but we need to also consider what could be called a secondary processing unit, which would be larger and a little better,” he said, adding that the entire activity would be viable, successful and useful if implemented this way.

Stressing the need to focus on local resources and local markets for promoting FPOs, he said initially the organisations should manufacture or develop sizeable quantities to develop better marketing and brand building.

Recalling that the policy on FPOs was announced long back, leading to several of them getting formed, he said some did not succeed due to inadequate hand-holding and dearth of expertise in FPO management.

Terming the government’s recent scheme for FPOs a good thing, he said it will cover financial as well as non-financial support to the members.

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Published on February 21, 2020
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