Agri Business

Why renewable energy is key to the success of farmer-producer organisations

Radheshyam Jadhav Pune | Updated on November 19, 2021

Fruit packing and processing unit at Nashik-based Sahyadri FPC. Pic courtesy - Sahyadri FPC

Women in Latur who have registered a FPC look at solar energy as the only option at the beginning stage of their venture.

Members of the SavitriBai Phule Goat Farming Producer Company Ltd. Pic courtesy - Savitribai Phule FPC

Under the PM-KUSUM scheme, FPOs can set up small solar power plants of up to 2 MW capacity and the power generated can be purchased by the distribution companies

Sangeeta Hankunte and other women in Nagarsoga village of Latur district of Maharashtra have recently registered a Farmer Producer Company (FPC). About 600 women farmers here plan to take their organic farm produce to the market themselves without the help of middlemen. In the future, they also plan to start processing units.

“We have just started and want to do a lot of things. Only cultivating is not going to suffice and we have to get into processing at some point,” says Sangeeta. Swaya Sakhi Shetmal Producer Company formed by these women is one of the organisations under the Government of India’s Central Sector Scheme for ‘Formation and Promotion of 10,000 Farmer Producer Organizations (FPOs)’ which aims to form and promote 10,000 new FPOs till 2027-28, with a total budgetary outlay of Rs 6,865 crore.

FPO is a generic name, which means and includes farmer-producer organisations incorporated or registered either under Part IXA of the Companies Act or under the Co-operative Societies Act of the concerned States, and formed for the purpose of leveraging collectives through economies of scale in production and marketing of agricultural and allied sector.

About 86 per cent of the farmers in the country are small and marginal and don’t have access to improved technology, credit, inputs, market linkages, and incentives to produce a better quality commodity. Hence, the government is promoting the aggregation of small, marginal, and landless farmers into FPOs, which will help enhance the economic strength and market linkages of farmers to enhance their income.

But one of the major problems these FPCs and FPOs face is of power supply, and renewable energy resources could play a major role in the success of ventures, say farmers.

Power requirement

“There are many FPCs in rural areas which use solar energy. My own FPC has been using solar power for the last few years for primary processing. But for heavy processing, we would need more power,” says Shivraj Kharbad, director of SSK Agro Farmer Producer Company in Yusufwadgaon village in Beed district.

Kharbad’s FPC has installed a 60 Kw solar plant on the rooftop of the processing unit. “We produce 200 units of power and will transfer it to the Maharashtra State Electricity Distribution Company Ltd (MEDCL), and use power with more capacity available with the MSEDCL. We don’t have to pay electricity bills to MSEDCL by exchanging our solar power with MSEDCL,” he says. Kharbad demanded that FPCs and FPOs should get all the facilities that industrial units are getting.

Under the PM-KUSUM scheme, small solar power plants of a capacity of up to 2 MW can be set up by FPCs and FPOs. Power generated from the solar plants is purchased by the Distribution Companies (DISCOMs) at tariffs determined by the respective State Electricity Regulatory Commissions (SERCs).

Many FPCs and FPOs are involved in the production, harvesting, procurement, grading, pooling, handling, marketing, selling, export of primary produce of members, or import of goods or services for their benefit. Processing, like preserving, drying, distilling, brewing, venting, canning, and packaging of the produce, requires power supply. One of the objectives of FPCs under the Companies Act is the generation, transmission, and distribution of power. And FPCs can set up their solar units under the scheme.

“Power shortage in rural areas is a cause for concern. Load shedding hampers almost all operations. Small FPCs will have to become self-reliant in power and for big FPCs involved in major industrial work, MSEDCL should make separate arrangements for power supply,” says Suresh Nakhate, Director of the Beed-based Sahyadri Balaghat Farmers’ Producer Company.

Farmers as entrepreneurs

According to the National Sample Survey (NSS 2018-19), 37 per cent of the income of agricultural households in India came from crop production and cultivation, compared to 48 per cent in 2012-13. More farmers now work for wages and also earn from animal farming, non-farm business, and leasing of land.

The latest Agriculture Census shows that the average size of operational holdings has decreased from 2.28 hectares in 1970-71 to 1.84 hectares in 1980-81, to 1.41 hectares in 1995-96, and to 1.08 hectares in 2015-16.

“These figures are a clear indication that farmers will have to join hands and work collectively. Farmers must control the primary, secondary, and service sectors when it comes to agriculture produce, processing, and marketing,” says Shetkari Sanghatana leader Anil Ghanwat.

Vilas Shinde, Chairman and Managing Director of the Nashik-based Sahyadri Farmers’ Producer Company in Nashik insists that farmer collectives are the answer to the agrarian crisis, which will help farmers overcome economic problems. He demanded that the government must facilitate the change by helping new FPCs and FPOs.

“If FPCs and FPOs have to survive and flourish, the government must promote renewable energy in a big way. Power supply remains a major issue for farmers and their companies. If the power supply issue is not resolved, FPCs and FPOs will just remain a number,” says Shivaji Kharbad.

The future of Sangeeta Hankunte’s FPC in Nagarsoga depends on how she and other women resolve power supply shortages and how much power they get to start their own processing units.

“We have started with marketing our produce. But yes, we definitely want to be entrepreneurs in the future,” says Sangeeta, who adds that they look at solar energy as the only option, especially in the beginning stages of their ventures.

(This story was produced with the support of the Earth Journalism Network)

Published on November 19, 2021

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