As high shipping costs limit the sales volume of farmer-producer organisations (FPOs) for delivering small-sized orders at consumer doorsteps, the proposed policy on FPOs is likely to address the concern. However, a delay by India Post as well as no firm financial support to subsidise the cost for some initial years have also contributed to the lower utilisation of the potential of the FPOs.

For instance, when a consumer from the national capital region tries to buy three packets of millet namkeen of 250 gm each, costing a total  ₹90 from one Jaden FPO of Cuttack in Odisha, one has to spend  ₹45, which is 50 per cent of cost, as shipping and other charges over the ONDC platform.

Operation Green scheme

Official sources said there are no hidden charges on ONDC and whatever is the actual charge has to be paid, unlike in popular and established platforms where delivery is free but shipping cost is included in the final selling price.

“Unless the government provides some subsidy or makes India Post take bulk orders from FPOs to re-distribute those products at the consumer’s doorstep, there is no solution. It is doable as the government is also concerned on tackling food inflation,” an official source said, adding there is an Operation Green scheme under which traders get 50 per cent subsidy on freight cost for transportation of vegetables including tomato, onion and potato from producing regions to consuming centres.

“If the product is coming from some small town at small volume, the shipping is going to be expensive for some time. Increase in quality or volume, will reduce costs,” an official said.

An FPO in Chhattisgarh sells 2 kg of Devbhog aromatic rice, marketed by TRIFED, on ONDC at ₹130 whereas the same FPO sells one kg of the same rice at  ₹130 on a popular e-commerce platform. “The MRP mentioned in the packet as  ₹400/kg and even after paying  ₹230, one assumes that he gets 43 per cent discount.” the official pointed out.

Talks on with India Post

Sources said FPOs are also facing issues with regard to visibility in those popular platforms where they don’t have money to burn on advertisements for priority displays over mobile App.

As India Post has the large network, it can certainly help the FPOs to get directly connected to consumers through ONDC, sources said, adding discussions have been going on for last one and half years without any result. “Top officials need to step in as this also part of doubling farmers’ income scheme and there is a need for a whole government approach,” said an expert.

“If the shipping cost is reduced, definitely orders will increase as currently we charge ₹49 or ₹61 per item depending on weight and distance of delivery location,” said Sharanu Nagavi of Jewargi FPO in Karnataka.