It's Farmers Inc

Decades of agrarian distress and failure of cooperatives have made marginal farmers take charge and form companies. Will this ensure a fair deal to farmers?

- Jitendra

WHEN THE Union finance minister announced a five-year tax holiday for farmer producer companies (FPCS) in Budget 2018-19, Ibrahim Shah Anwar was ecstatic. A marginal farmer and a shareholder in Swaroop Shetkari Producer Company Ltd (SSPCL), an FPC based in Sultanpur block of Aurangabad district, Maharashtra, Shah knew that the news meant profit.

SSPCL is one of the 5,000-odd FPCS that have mushroomed across the country in the past two decades, according to the Union Ministry of Corporate Affairs. Also known as farmer producer organisation (FPO), these companies play the role of intermediaries—they aggregate crops from member farmers and sell. Since they deal in bulk, FPCS are better placed to negotiate the selling price, and make more profits. The only difference, and a crucial one at that, is that the profits go directly to farmers because they own and run the companies. SSPCL, for instance, is owned and run by about 300 farmers of Sultanpur.

“The company aggregated tur (pigeon pea) in 2017 from the farmers and sold it to the state government at the minimum support price (MSP) of R5,050 per quintal (1 quintal equals 0.1 tonne) when the market price was less than R3,500 per quintal,” says Deepak Chouhan, CEO of SSPCL and a farmer in Sultanpur. “For the first time in my life, I sold my 1.5 tonnes of tur at the MSP and collected a cheque of over R78,000,” says Shah.

SSPCL is a part of Maha Farmers Producer Company Ltd (maha-FPC), a group of 150 FPCS of Maharashtra. Recognising the reach of maha-FPC, the state government authorised it to buy pulses from farmers at MSP on its behalf in February 2017. This broke the decades-old monopoly of traders in 14 districts, particularly in the agrarian-distressed Marathwada region.