Agri Business

How lockdown helped FPOs innovate and earn

Rahul Wadke Mumbai | Updated on June 24, 2020 Published on June 24, 2020

While the Covid-induced lockdown proved to be disastrous for many small and medium enterprises, it seems to have brought the best in Maharashtra’s farmer producer companies. For instance,

Maha Farmers Producers Company Ltd (MahaFPC) reached a revenue of ₹550 crore from pulses procurement alone.

As the traditional markets managed by the Agriculture Produce Market Committees(APMCs) were either closed down or their operations disrupted, the farmer producer companies (FPOs) stepped in by procuring the farm goods at the villages and taking them to the end customers.

Yogesh Thorat, Managing Director of MahaFPC, a State-level consortium of 303 FPOs reached a turnover of ₹550 crore in the last three months because it qualified as a procurement agency for Nafed and Food Corporation of India. It procured tur (pigeon pea) and chana (chickpeas) from the farmers through their member companies across the Vidarbha and Marathwada region, he said.

Open procurement centre at the village level has been a major strategy, which MahaFPC has been following for the last two years and when lockdown happened, which led to the closing of many APMCs due to fear of the pandemic, the MahaFPC was used for procuring the pulses.

Thorat said the procurement centre at the village level is an old strategy of MahaFPC. It has always been trying to create an alternative platform for APMC- run market yards.

He said in the last three months the company could reach higher revenue because the Union government, under various schemes, created buffer stocks of the pulses. Earlier, rice used to be procured as buffer stock but in the last three months, pulses, too, have been procured as buffer stock.

On the other hand, for an established FPO player such as North Maharashtra-based Sahyadri Farms, the lockdown created its own set of problems as well as opportunities.

Vilas Shinde, Chairman of Sahyadri Farms, told BusinessLine that the lockdown was implemented on March 25, it coincided with the peak grape season, which threw out of gear the procurement, logistics and exports of grapes. The grapes business shrunk to ₹2 crore from about last year’s ₹17 crore.

But it led to an opportunity in terms of supplying fresh fruits and vegetables to Mumbai, Pune and Nashik cities in the retail market. The company managed to supply 7-12 kg baskets of fruits and vegetables once a week to families in thesecities. It managed to supply 2.5 lakh baskets to 90,000 customers across 850 housing societies in the cities. About 3,500 tonnes of fruits and vegetables were sold through this route. Losses in grapes could be offset by the uptick in other fruits and vegetables, he said.

Shinde added that last year at the end of the June quarter, the revenue was ₹69 crore but this year it has reached about ₹74 crore, despite the losses in grapes.

Published on June 24, 2020
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