Enabling institution models for sustainable farmer producer companies

Abstract

In the recent years, the focus of the Government of India, state governments and the various development agencies has been towards producer companies. The international development agencies including the UN agencies such as World Bank, UNDP, and FAO have also been showing their interest in investing in these organizations. Many of the Non-Government Organizations (NGOs) in the country had been facilitating formation of producer organizations and in the recent years while some of them have graduated to facilitate formation of producer companies on behalf of the state governments and development funding agencies. Although there exists variety set of institutions such as APMCs, Cooperative Banks, Primary Agriculture Cooperatives (PACs), RRBs, Cooperatives etc to cater to address these challenges. These institutions could not have addressed all these challenges as they have limited propositions and objectives. And unavoidable involvement of syndicated middlemen who takeaway hard earned profits or net incomes on produce marketed instead of creating overall an enabling environment. It is envisioned that Producer Company (PC) model could accommodate what is not available in the existing producer organisation models. Few PCs promoted by the leading development agencies have proven to be practically successful in a medium to long term horizon. However there are still challenges as this model is not much tested. This policy paper is an attempt to come with policy recommendations for the policy problem with respect to sustainable farmer producer companies by studying PC institutional framework with existing producer organisation models, learning from self-experience in promoting a PC, stakeholder s analysis and alternative approaches to an enabled institutional framework for going forward.