Extension Strategies and Models in Agri Trading through Farmer Producer Companies (FPCs): A Way towards Sustainability

Abstract

Despite this rapid growth, many FPCs are grappling with nascent stages of development and are encountering numerous challenges. The current emphasis on promoting 10,000 FPCs has brought to light a pressing issue: the sustainability of existing FPCs within the agricultural value chain. Thus, this study aims to scrutinize the prevailing extension strategies and trading models employed by FPCs through a detailed case study analysis. Additionally, the study proposes models for fostering the sustainable growth of FPCs, aimed at mitigating market risks. The extension strategies and models under discussion advocate the collaboration of commodity and value chain-specific FPCs under an institutional leadership framework for a federated approach. This involves linking FPCs to markets through startups facilitated by incubation centers and digitally connecting FPCs to direct marketing channels via ICT interventions. The study delineates models such as the BOTT model, Federated model, and ICT-FPO model. It suggests that a commodity and value chain-specific marketing channel can be effectively managed by an Anchor Institution (AI) in partnership with FPCs, which act as suppliers of quality produce adhering to mutually agreed standards. This underscores the importance of adopting a flexible approach tailored to the unique needs of producers, ensuring the long-term viability and success of FPCs. Additionally, FPCs can collaborate with startups in their early years to procure agricultural produce and market their products through startup outlets. FPCs in their initial stages can also act as procurement agencies, similar to the Food Corporation of India (FCI), with government licensing to reduce risk. Implementing a pre-order system for early booking, coordinating with other FPCs for regular supply under an Anchor Institution, and providing adequate storage facilities through warehousing are further steps to enhance FPO sustainability. Training farmers in order management and using technology for uninterrupted material and information flow along the supply chain are also crucial. Lastly, funding and technical support from institutions like NABARD and SFAC are essential until the FPO reaches the break-even point. Flexibility is key in catering to producers' needs, and therefore, scaling up FPCs is a significant endeavor.