Located in the Kodangal Mandal of Telangana’s Vikarabad district, this cluster of Farmer Producer Companies tells of a success story unlike any other.
When women are to put to the fore, they make efficient managers, and with the right opportunities, they truly shine in different career fields. Built on similar line of thought, Access Livelihoods Consulting India (ALC India), an incubator for women-led social enterprises at grassroots levels, works with women at the centre and believes that empowering women as individuals has a holistic impact on each household. Standing witness to this is the Kodangal cluster producer companies.
With over 50 percent of India’s population dependant on agriculture as a means of livelihood, 68 percent of these farm households are small, marginal, and comprise of tenant farmers. They earn a meagre amount of Rs 5,000 annually, struggling to subsist. However, on the contrary, women farmers coming from three rural villages in Vikarabad district have a different story to share ever since their lives transformed in 2013.
Promoting a sustainable agri-business model
The project to incubate three Farmer Producer Companies (FPCs) was undertaken when ALC India got the opportunity to set up an agricultural enterprise for the first time in 2012. The three FPCs, namely Hasnabad, Kodangal and Angadi Raichur Farmer Producer Companies came through Small Farmers Agribusiness Consortium (SFAC), a Government of India enterprise. Funds to incubate, train and provide services to every farmer in the company for a time period of three years was also allocated by SFAC.
Following this, a sustainable business model was created to fill gaps in the value chain that lowered the income of farmers in the Hasnabad, Kodangal and Angadi Raichur villages of Mahabubnagar district. Senior Project Executive, Aravind Jerry (27), says that the reason to work with women farmers was strategic, “Working with women is a strategic choice; with them we are certain to have a stronger impact on the household level. Also, with most men migrating to urban cities for better jobs, women know more about farming given the amount of time they spend working in fields.”
With a business model in place, the next step was the establishment of a large enterprise with ownership, control and decision-making authority provided to small farmers. These enterprises were registered as producer companies in 2013 after a board of directors was elected by the farmers from among the members in their group through a democratic process.
Working with women farmers
ALC India has worked towards creating large scale producer companies by bringing together farmers under each FPC. The FPC then procures and sells what they produce by themselves with no need for a middleman. “This helps the farmers take charge of their business and own the value chain,” says Aravind.
The foremost services provided by the FPCs are supply of agri-inputs and procurement of commodities produced by the member farmers which is then sold to the markets. The main commodities are red, green and black gram including groundnut. They are also exploring the possibilities of cultivating cotton in the coming years.
Along with empowering and making rural women farmers independent, the aim of each FPC is to provide these services in many ways without profit being the only aspect in sight. The services are in form of capacity building sessions and agri-inputs along with skill development, direct linkage to markets, and raising funds to set up infrastructure. These services have resulted in enhanced income and employment among the communities in all four years.
The farmers are also trained and skilled on new technology and techniques to improve cultivation and procurement. Similarly, agri-input services have reduced the burden of farmers in multifarious ways. Today, farmers can place an order for seeds and biofertilizers with advice from the experts and receive doorstep delivery service. They do not have to travel long distances for these requirements. In addition, the farmers are given credits and savings. They can save and avail loans from the FPC for both professional and personal purposes.
Bringing together large groups of women has scaled each producer company, provided direction and reinforced bargaining power to help farmers tackle bigger organisations. The FPCs have also set up centralised units carrying out commodity processing under one roof.
A quantum leap over challenges
It is hard to gain the trust of rural farmers, says Aravind, “Mobilisation was extremely difficult. With a number of NGOs visiting villages almost every day, they promise change and growth. Most do not live up to these hefty promises, making farmers hesitant.” Opposition from menfolk was also a major challenge ALC managed to overcome by breaking preconceived gender roles. Also, many a times, farmers refused to return loans and repay money for the input services provided. Due to this, a lot of convincing goes into retrieving back money which slows down the process in certain cases.
But besides these roadblocks, each of the FPCs, that started out with farmers possessing not more than 2.5 hectares, today have nearly 1,000 members as shareholders, a number that has gradually grown over the years. In the financial year 2016-2017, the three producer companies conducted red gram procurement business worth Rs 15.5 crore.
In the same year, Kodangal FPC made a turnover of over 3 crore with Hasnabad and Angadi Raichur FPC making 7.74 and 6.61 crore, respectively. Along with this tremendous impact, each household across all three villages have experienced a 20 percent overall increase in income.
Impact and recognition
One of the many grassroot success stories is that of Teja Rani, a shareholder in the Hasnabad FPC. A shy and timid personality, Teja lacked support from her family. Upon joining the company, her life has taken a positive turn. She says, “As one of the most active members, I am able to support my household. I am no longer shy, but an independent and confident woman today.” Teja has her own bike and has admitted her children in a residential school.
The Hasnabad FPC was awarded the Best Business Practices at Krishi Vikas Summit organised by The Economic Times in 2015 for its contribution to the field of agriculture. The primary reason for its success rate is that even after the end of the three-year contract with SFAC, ALC continues to support and guide these FPCs independently. “Farmers know what they are best at, which is farming. For them to learn all the nuances of business in just three years is asking for too much. According to us, it takes at least eight years of handholding to create a robust and sustainable producer company,” says Aravind.
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For future developments, each of the FPCs have purchased two acres of land to construct warehouses of their own, cutting down on the need to rent. This will be done using the funding ALC received from Niti Aayog to improve and develop existing enterprises at the grassroots. In terms of establishing FPCs, the current goal is to reach out to 2,500 members by 2020 in 10 villages of Kodangal Mandal, Mahbubnagar district.
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