Product Aggregation And Sale Through Producers Association

Maharashtra is a leading producer of fruits, vegetables and flowers. The production of fruits in Maharashtra stood at 100.54 Lakh MT and that of vegetables at 77.29 Lakh MT in the year 2008-09. The state has strength in production of grapes, mangoes, banana, pomegranate, oranges, tomato, and onion. Though the production of these fruits and vegetables has increased many folds, poor post harvest practices are followed leading to substantial loss in value of these commodities.

Similarly, Maharashtra is also a major cereals and pulses producer. The total production of cereals, pulses and oilseeds was 161.18 Lakh MT in the year 2008-09. Inadequate availability of post harvest facilities at the village level also leads to loss to cereals and pulses producers. Graded product will bring additional return to producers due to value addition.

These constraints affect the income of the farmer, mainly due to inadequate post harvest handling facilities at village level. In order to address these issues and to provide village level basic infrastructure for post harvest handling like cleaning and grading of food grains and cleaning, grading, packing of fruits and vegetables in more hygienic conditions, it is proposed to establish the Farmers’ Common Service Centers (FCSCs) by the Producers’ Associations (PAs) formed by the Producer Groups (PGs) of the farmers or by producers.

Group Activity is more effective for the benefit of the members of the group than the individual efforts. Informally formed small groups called as self help groups have exhibited their strengths in various fields including agriculture, in improving financial conditions of the members.

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Maharashtra is a leading producer of fruits, vegetables and flowers. The production of fruits in Maharashtra stood at 100.54 Lakh MT and that of vegetables at 77.29 Lakh MT in the year 2008-09. The state has strength in production of grapes, mangoes, banana, pomegranate, oranges, tomato, and onion. Though the production of these fruits and vegetables has increased many folds, poor post harvest practices are followed leading to substantial loss in value of these commodities.

Similarly, Maharashtra is also a major cereals and pulses producer. The total production of cereals, pulses and oilseeds was 161.18 Lakh MT in the year 2008-09. Inadequate availability of post harvest facilities at the village level also leads to loss to cereals and pulses producers. Graded product will bring additional return to producers due to value addition.

These constraints affect the income of the farmer, mainly due to inadequate post harvest handling facilities at village level. In order to address these issues and to provide village level basic infrastructure for post harvest handling like cleaning and grading of food grains and cleaning, grading, packing of fruits and vegetables in more hygienic conditions, it is proposed to establish the Farmers’ Common Service Centers (FCSCs) by the Producers’ Associations (PAs) formed by the Producer Groups (PGs) of the farmers or by producers.

Group Activity is more effective for the benefit of the members of the group than the individual efforts. Informally formed small groups called as self help groups have exhibited their strengths in various fields including agriculture, in improving financial conditions of the members.

FCSCs are conceived as small scale commercially viable entities owned by PAs. The FCSCs will support 250-300 members, through Producer Groups (similar to SHGs) of around 12-19 active members in each Producer Groups (PGs). The FCSC will mainly deliver some basic value added activities, in grain and horticulture and carry out input marketing and output marketing. This would involve supply of inputs like seeds, fertilizers, manures, pesticides, cattle feed to the members & farmers and also aggregation of produce, its cleaning, grading and marketing.

Around 15-20 PGs will be formed in a village or a group of villages within the radius of 3-5 Kms. These PGs will be federated in to a PA which will be registered under the Society Registration Act, 1860 with the Charity Commissioner to have the legal status / other suitable Acts. While forming PAs, the existing groups eligible for inclusion in PA will be considered besides the new groups to be formed. The inclusion of existing PGs in formation of FCSC should have at least 12-19 active members, the working of the group should have been stabilized and it is functioning regularly and it should be willing to join FCSC and share the responsibility of contribution for the FCSC infrastructure.

The MACP proposes to establish FCSCs with the main objective of aggregation of agricultural produce and for providing basic minimum value addition facilities like cleaning, grading, packing and input marketing. The number of FCSCs proposed to be formed would be as follows:
(i) FCSC (Food grain) - 200 FCSCs (Food grain) for cereals / food grains for providing cleaning, grading, and packing facilities. These FCSCs will be linked to the MSWC godowns identified for providing Warehouse Receipt Financing and Electronic Trading Services. These FCSCs will also have the options to avail the warehouse receipt from the selected identified and accredited APMC godowns within the vicinity of the MSWC godowns.
(ii) FCSC (Fruits and Vegetable) - 200 FCSCs for fruits and vegetable for providing cleaning, grading, and packing services to fruits and vegetable farmers. Preference would be given to districts having higher density of production of fruits and vegetable, i.e. over 1,000 MT per sq. km. FCSCs will bring advantages like saving in commission agents charges, market fees, other marketing expenses like hamali, and still be able to link with the value chain reducing substantially the transactional cost.

The FCSCs, the Producer Groups and PAs will be mobilized by Service Providers, i.e. Non- Governmental Organizations (NGOs)/ companies / other legal entities. It is envisaged that an elected committee of members of Producers Groups will form a management committee and oversee the performance of an incentivized manager. The manager will be trained in technical issues of post harvest management, marketing and in operating a transparent accounting system by SP. The Service Provider will support the operation of the Producer Association, and to accelerate the cross learning of best practices.

The FCSCs will be studied by an ABPF managed consultancy contract so that the lessons learnt, both from successes and causes of failure, on management, processes, marketing, partnership arrangements and the financial and businesses mode; can be rapidly understood and used to improve the design of new FCSC and to enable banks to be able to better assess the potential for investing in such facilities.

Successful FCSCs will be encouraged to undertake further investment, including productive investment, limited to Rs. 20.00 Lakh with additional support from the Project to develop from a basic FCSC into an Agri Mart. It is expected that nearly 20% of the FCSCs will graduate to a higher level of activity after successfully implementing the basic infrastructure. These FCSCs which will graduate to a level of Agri Mart will function at village / taluka level depending on the success of FCSCs.

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