The agriculture ministry approved on November 4, 2022, the setting up of 100 fodder-centric Farmer Producer Organisations (FPOs) during 2022–23 to address the fodder issues in the country. The Ministry of Fisheries, Animal Husbandry, and Dairying had proposed in 2020 the establishment of fodder-centric FPOs and requested the formation of such FPOs to be allowed under the scheme ‘Formation and Promotion of 10,000 new FPOs’. The government has also mentioned that the National Dairy Development Board (NDDB) will be the implementing agency to set up these FPOs. The NDDB will also include animal husbandry as a secondary activity, called the fodder-plus model.
About FPOs
An FPO is a producer organisation where farmers are the members. Small Farmers Agribusiness Consortium (SFAC) was mandated by the Ministry of Agriculture & Farmers’ Welfare to facilitate the process. An FPO acts as a collective unit of farmers to manage different aspects of farming such as inputs, final output, and marketing. FPOs will not only lead to improved economies of scale and the bargaining power of the member farmers but will also make arrangements to store unsold output. (As per Investopedia, economies of scale are cost advantages reaped by companies when production becomes efficient, as costs can be spread over a larger number of goods. In simple terms, economy of scale can be defined as a proportionate saving in costs gained by an increased level of production.) FPOs as a whole sell the produce on e-trading platforms on behalf of their members. Payments are directly made to the FPOs and they distribute it among their members. In 2017–18, the provision for facilities to collect, sort, grade, and pack was made. FPOs provide facilities and equipment to their member farmers at an individual’s lower cost and as it is a collective initiative, FPOs not only help male farmers but also women farmers.
Initially, FPOs emerged as a new form of aggregation model in India after the Companies (Amendment) Act 2003.
Significance of Fodder-based FPOs
The establishment of fodder-centric FPOs is important in the present scenario as India is facing a fodder shortage for the past few years. The shortage has increased with the low production of wheat this year and the rise in input costs. According to the Indian Grassland and Fodder Research Institute, there is a 23.4 per cent deficit in the availability of dry fodder, 11.24 per cent in green fodder, and 28.9 per cent in concentrated fodder (a mixture of cakes, cereal grains, tapioca chips, rice bran, wheat bran, gram husk, etc.).
As per the Wholesale Price Index (WPI), fodder inflation is 25.5 per cent which is a 9-year high. This reflects the difficulties faced by the people involved in cattle and livestock rearing.
High fodder inflation directly impacts rural livelihoods. According to a report titled Situation Assessment of Agricultural Households and Land and Livestock Holdings of Households in Rural India, 2019, published by the National Statistical Office, 8.37 crore (48.5 per cent) of the total 17.24 crore rural households owned cattle ‘in milk’, young cattle and cattle in ‘others’ category during July—December 2018. Further, 43.8 per cent of the total 9.3 crore agricultural households used green fodder, 52.4 per cent dry fodder, 30.4 per cent concentrates, and 12.5 per cent other animal feed during the period. This data clearly reflects the number of the rural household involved in animal husbandry. It is, therefore, clear that these FPOs would help rural households and provide them with a platform to come together and avail the benefits of economies of scale and reduced costs. It would also increase their power to demand and bargain.
Emphasis on Implementation
The intention to introduce fodder-based FPOs and to establish 10,000 FPOs by the government is commendable. However, critics say that these 10,000 FPOs are merely on paper and the implementation is not up to the mark. With the benefits of FPOs already seen in different parts of the country, it is important to put the plan into action and provide an alternative to farmers to express and solve their problems collectively. With crores of people affected by the FPOs, there is an urgent need to form and implement them immediately.
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