Over 35% FPCs process multiple documents for registration: Survey

Access to crop insurance and agricultural machinery was limited, with 50 per cent of FPCs lacking crop insurance and 61 per cent without access to agricultural machinery

A study on farmer producer companies (FPCs) has found that around 36 per cent of such business entities had to process too many documents for registration, while 22 per cent indicated that they had to visit multiple offices.

 

While the management and governance appeared robust with almost 98 per cent of FPCs possessing a CEO, around 24 per cent did not receive any support for knowledge, skills, or marketing, according to the survey done by the National Association for Farmer Producer Organisations (NAFPO) along with the Development Intelligence Unit (DIU).

 

The findings were published as part of a chapter in the annual State of the Sector Report 2024 for Farmer-Producer Organisations/Companies (FPOs/FPCs). The chapter titled ‘FPOs: Status, Perspectives and Prospectus’ has been written by Anish Kumar and Aneesha Bali.

   

It found that access to crop insurance and agricultural machinery was limited, with 50 per cent lacking crop insurance and 61 per cent without access to agricultural machinery.

 

Data from respondents across six states of Andhra Pradesh, Tamil Nadu, Madhya Pradesh, Uttar Pradesh, Rajasthan, and Maharashtra were collected for the survey.

 

A set of questions with multiple-choice options was prepared and responses from 67 of them were used for the survey.

 

The survey also showed that around 85 per cent of FPCs had their own GST licence while 56 per cent of them received assistance from NGOs and 29 per cent from the government. 

 

When it came to management and governance structures in FPCs, the survey found that 98 per cent of FPCs had a CEO, 76 per cent had an accountant, and 85 per cent had an independent director to guide compliance and market linkage.

 

Additionally, 71 per cent of FPCs engaged a full-time chartered accountant, and 58 per cent used software to maintain accounts, with Tally and SimplyKhata being the most popular choices.

 

Tracking of performance was mainly done manually in almost 71 per cent of the FPCs, while 21 per cent used software.

The survey showed that 58 per cent of them received assistance from government institutions, 40 per cent from NGOs, 11 per cent from Cluster Based Business Organisation (CBBO), and 10 per cent from state federations.

 

However, 24 per cent did not receive any support for knowledge, skills, or marketing. The survey also found that only 49 per cent of FPCs were associated with their respective state federation, while 51 per cent were without support for broader market linkage.

 

Only 10 per cent of FPCs are involved in online marketing, indicating either a lack of awareness or inadequate knowhow of tapping the online channel.

 

On access to infrastructure and other resources, the survey found that while 34 per cent of FPCs have warehouse access, 62 per cent hold a fertiliser licence, 53 per cent have a pesticide licence, and 52 per cent possessed a mandi licence.

 

"The data highlights several key areas where FPCs are performing well. The presence of CEOs in 98 per cent of the FPCs is a clear indicator that the Board of Directors (BODs) is working well towards having a committed leadership,” the authors wrote.

 

“On the other hand, documentation and licensing emerge as challenges, which create obstacles in rendering certain basic and easy-to-offer services to member farmers. These are not insurmountable challenges, provided there is an enabling ecosystem," they concluded.