06/10/2022 - Agriculture

KEY POINTS

·        Due to Green Revolution it resulted in excessive concentration of a few crops namely rice, wheat and sugarcane resulting in deterioration of soil health, over exploitation of ground water and skewed market linkages.

·        Some of the FPOs based in Karnataka, Telangana and West Bengal are engaged in procuring agri-inputs and rendering services to their members at reasonable prices which ultimately reduce the cost of production.

·        Typical challenges faced by farmers in this context are lack of awareness, inadequate agri-value chain infrastructure, and indebtedness of the farmers which force them to resort to distress sales without value addition.

·        Majority of the FPOs work as simple intermediaries by aggregating agri-produce and engaging in primary processing activities: grading and sorting.

·        As small and marginal farmers are the majority (86.08 per cent as per Agricultural Census 2015-16) in India, they should be encouraged to be members of FPOs to reduce costs, enhance incomes and ensure food, nutritional, and financial security.

·        Besides, the FPOs need to explore export markets in order to double farmers’ income.

·        Apart from having access to formal finance, the FPOs must be allowed to list on Social Stock Exchange to mobilise risk capital.

·        In sum, aggregating farmers can improve their collective bargaining power in input, credit and output markets and leads to better price discovery.

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