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Re: Enabling rural cooperatives and producer organizations to thrive as sustainable business enterprises

Mr. Subhash Mehta Devarao Shivaram Trust, India
16.07.2012
Subhash

The role of small holder producer organizations/ company (PC) interventions could feed the world and promote economic growth” The Government of India, realising the problems faced by the Cooperatives and Societies, being a department of the State Governments, legislated the Producer Company (PC), amendment IX-A of the Indian Companies Act 1956, as a sustainable local community enterprise institution of, for and by the smallholder farmer/and rural producers. The PC has the features of an enterprise and will be driven by the cooperative and societal spirit of the community. This local institutional intervention, staffed by professionals, will serve as a single window through which their members (smallholder farmer/ rural producers) will transact with various external forces by taking over the risks and responsibilities, viz., management, finance, banking, imparting knowledge/ training and capacity building, product development, factor market, capital market, research-extension services, value addition, delivery of government programmes, logistics, etc.. It will also be responsible for all internal management of the smallholder farmers/producer viz., integrated agricultural production for meeting their own need of nutritious food and at farm gate prices, planning, budgeting, value addition, women empowerment, nutrition, health, education, increasing purchasing power and net incomes, ensuring safety, quality, livelihood improvement of the small holder farmer/producer families and their communities and a positive 'cash to cash cycle'. To be able to put up such a farmer led and professionally managed local institution, public funding towards overheads, working capital, basic infrastructure, technical and managerial support need to be provided for the first 5-8 years, depending on the nature and type of agricultural communities. An example of such a Producer Company can be viewed at navajyoti.org. The Funding and Loan Projects considered by the Financial Institutions must not only directly fund the PC intervention as the PEA but also make such an intervention compulsory, before sanctioning any project, as it takes over all risks and responsibilities from its mostly illiterate, resource poor members, other than on farm activities. The Governments of developing countries need to make huge investment in this area for not only correcting the mistakes made in the past but also for feeding their populations and ensuring economic growth, but also to get back the small holder farmer / rural producers at the centre of sustainable farming activities. Briefly, the functions of the Producer Company (PC) will be: PCs will be set up by competence and capabilities of the rural producers, staffed by unemployed educated youth trained to become GPs in agri 'culture'/ professionals to take over all risks and responsibilities other than on farm activities, requiring handholding by the village elders, CSO/ NGO working with the community, till break even ( about 5 years) Increase net incomes and purchasing power of members by focussing on the local successful integrated agriculture producing to meet their own nutrition, food and health needs at farm gate prices, surplus sold in the vicinity for meeting their cash needs, achieving long term sustainability Impart now how/ training of the successful integrated farming in the area, especially on farm production of quality inputs and water conservation Contracting successful farmers, for training on their model farms and wide replication of their integrated agriculture system, to meet their nutrition, health, food and cash needs Arrange with financial institutions (IFAD, NABARD, etc.) the annual limits for capital, seed capital and working capital needs Primary and secondary value addition to increase shelf life of produce/ products, minimizing post harvest losses and increasing net incomes Plan, budget and market produce/ products at farm gate price to members/ communities, for meeting their nutrition, food and health needs, surplus first stored as reserves for emergencies and balance converted to cash in the vicinity (food miles) Empowerment of women by fully involving them in the planning, budgeting, decision making and Governance of the PC Convergence of Government programmes and schemes for delivery to members Etc. Prior to setting up the PC by the rural producers in that community, they need to be given all the information about the features of the PCs and the benefits that would accrue to them by their NGOs and the local Government bodies. The role of NGOs will be vital as the rural communities have lost faith in the mainstream agriculture systems, having been driven to hunger and poverty, if we are to succeed in the execution of the project during its formative period. It is understood that their role would be confined to organizing communities, creating cadres, building trust, developing skills and overseeing the professionals staffing the PC, etc., important role in ‘hand-holding’ until the business breaks even, the staff has the confidence to manage the ‘cash to cash cycle’, thereafter keeping an eye on the professionals and thus ensuring that the interests of the resource poor illiterate members are protected. Subhash Mehta, Trustee, Devarao Shivaram Trust, NGO Association for Agricultural Research Asia Pacific (NAARAP), Hegenahalli PO, Devanahalli Taluka, Bangalore Rural North.