Farmer Producer Organisations in Maharashtra: Prospects and

Challenges

ABSTRACT
Farmer Producer Organisation aim is to ensure better income for the producers through an
organization of their own. This study has included Ahmednagar, Aurangabad, Jalgaon, and
Pune districts of Maharashtra because of their highest frequency of FPOs. It was found that
the majority of the FPOs selected were engaged in the production and marketing of the crops
and the maximum share of the FPOs was promoted by NABARD, World Bank scheme. The
majority of FPOs members were in the range of 101-500. While the majority of FPOs were
established between 7-8 years. Inadequate contribution by the member exists because of the
poor economy and inadequate finance, lack of transport, distance of the market, storage
facility, and lack of own office building.
Keywords: Farmer Producer Organisation, Challenges, Schemes, Maharashtra, Benefits.

1 INTRODUCTION
1.1 Background
After the 1990s, the state shows a withdrawal policy from productive and economic functions
soon after the adoption of liberalization and privatization in Indian agriculture [1]. It created a
significant gap in farmers' well-being, which was quickly filled by the private agribusiness
sector. In between 2010-11 and 2015-16, small and marginal farmers increased from 84.9%
to 86.2%. And, size of average land holding declined from 1.15 hectares in 2010-11 to 1.08
hectares in 2015-16 [2]. Under the NITI Aayog, India's Prime Minister, Shri. Narendra Modi
has emphasized doubling farmer income by 2022. In a paper published in 2015, the NITI
Aayog stated that five issues must be addressed in order to improve farmers' livelihoods.
Increased productivity, remunerative prices for farmers, a focus on land leasing and land
titles, risk adaptation and mitigation, and a geographic focus on the eastern region are among
these goals [3].
1.2 Producer Organisation
A producer organisation is a formal rural institution whose members have gathered together
with the goal of increasing farm profit through better production, marketing, and local
processing [4]. Producer Organisations deal with policies relating to pricing, export, and
import of agricultural products, agricultural production practices, and access to inputs and
services, along with credit to agriculture, agricultural marketing, and local processing and
marketing of agricultural production.
1.3 Legal Forms of Producer Organisation s
A Producer Organisation can be organized in different forms. The possible forms may be
i) A Co-operative society
ii) A Producer company
iii) A Non-profit society
 iv) A Trust
v) A Section 8 company
1.3.1 Producer organisation as a cooperative society
A co-operative is an autonomous group of people who have come together voluntarily to
meet their economic, social, and cultural needs and aspirations through a jointly owned and
democratically controlled business (Committee for the Promotion and Advancement of
Cooperatives, COPAC 1999). cooperatives across the developing world have been more of a
failure than success and are alleged to have led to exclusion of really poor, elite capture of
such bodies, promoting differentiation instead of equity in rural communities like in the case
of sugar co-operatives in Gujarat [5].
1.3.2 Producer organisation as a producer company
The concept of producer companies was introduced in 2002 by implementing Part IX A into
the Companies Act, based on the recommendations of an expert committee led by noted
economist Sh. Y. K. Alagh, was tasked with framing legislation that would enable the
incorporation of cooperatives as companies and the conversion of existing cooperatives into
companies while maintaining the unique elements of cooperative business with a regulatory
framework similar to that of corporations. A 'Producer Company' can only be owned by those
who operate in the primary production industry. Members are expected to be "primary
producers."
1.3.3 Producer organisation as a non-profit organisation
A non-profit organisation is one that is prohibited from distributing its financial surplus to
those who regulate the use of the organisation 's assets, either by external regulation or by its
own governance structure [6]. Non-profit boards have some ownership rights, which are
direct use resources, but not others, such as the right to profit from those resources and sell
those rights to others for a profit [7]. A non-profit society can be defined as a group of people
(usually unincorporated) who have come together by mutual consent to deliberate, decide,
and act together for a common goal.
1.3.4 Producer organisation as trust
Transfer of property by the owner to another for the benefit of the third person with or
without the owner is called a trust. Trust is of two types Public and private. Private trusts are
not intended for commercial activities they are mainly for charitable and religious purposes.
Benefitting the public at large or some considerable portion of the public is known as a public
charitable trust. When it comes to benefits, private trust is very specific. A Producer
Organisation can be registered as a Trust for one or more of the following purposes: relief
from poverty or distress education, youth development, medical relief, provision of facilities
for recreation, or, even other spare time occupation in the interest of social welfare and public
benefit, and/or progression of any other object for general public utility, except religious
teaching or worship. The trusts, like non-profit organisations, can fundraise through
donations, gifts, grants, and/or loans. If it is formed for charitable purposes, the income of a
PO registered as trust is exempt from income tax.
1.3.5 Producer organisation formed as section 8 company
Companies that are formed solely for the purpose of promoting commerce, art, science,
religion, charity, or any other useful object are known as Section 8 Companies. The PO must
meet the following requirements in order to register as a Section 8 company: a) Minimum 2
shareholders (for a private limited company) and 7 shareholders (for a public limited
company); b) Minimum 2 directors (for a private limited company) and 3 directors (for a
public limited company); c) Every director must obtain a DIN (Director Identification
Number); d) At least one director of the PO must obtain a Digital Signature; e) Memorandum
of Association and f) Article of Association. Uniform law across the country, preference in
foreign funding over others due to stringent disclosure norms and regulatory provisions under
the Companies Act, 1956 and the Foreign Contribution Regulation Act, recognition of
Section 8 Companies by the Central and State Governments in various Schemes implemented
by them, a wide range of activities, exemption from using the words Private Limited or
Limited, members/owners easily transfer ownership in shares and interests, and exemption
from using the words Private Limited or Limited.
1.4 Mechanism of Doubling the Farmers’ Income through Farmer Producer
Organisation
Farmer Producer Organisations are based on the idea that farmers who produce agricultural
products can form groups and register under the Indian Companies Act. The Department of
Agriculture and Cooperation, Ministry of Agriculture, Government of India, has mandated
the Small Farmers' Agribusiness Consortium (SFAC) to assist state governments in the
formation of Farmer Producer Organisations (FPOs). The goal is to improve farmers'
competitiveness and give them a leg up on new market opportunities. In response to the
difficulties faced by marginal and small farmers, a variety of initiatives have arisen. The first
approach is assisting marginal and small farmers in taking collective action. Agricultural
cooperatives, which were established by the Co-operative Credit Societies Act of 1904, have
long been the most common type of farmer collective; yet, cooperatives have too many
limitations that restrict effective collective action.
1.5 Benefits of FPOs for the Members
A. Better farm income
By first determining demand and then purchasing in bulk, an FPO can ensure a higher
farm income for its producer members. Furthermore, by transporting in bulk,
transportation costs can be controlled, lowering the overall cost of production.
Similarly, the FPO may pool all members' produce and sell it in bulk, resulting in a
higher price per unit of produce.
B. Provision of market information
Information about the market the FPO can also provide market information to
producers, allowing them to keep their produce until market prices improve. All of
these interventions will increase primary producers' income.
C. Economies of scale
Organisations with a large membership base can also benefit from collective ordering
and purchasing, allowing them to provide certain common items to their members at a
lower cost. Ordering costs, transportation costs, and economies in large-scale
purchases of agricultural inputs such as seed, fertilizers, pesticides, agricultural
 equipment, and so on behalf of their members are all part of the cost savings because
of the scale of economies.
D. Enable vertical integration
Producer-owned organisations were good examples of vertical integration based on
horizontal coordination of farmers as initiators because they demonstrated that by
cooperating, farmers in the upper part of the food chain could significantly improve
their countervailing power and establish ownership if they could secure strict quality
requirements, solid financing, loyalty, and trust in their organisations [8].
E. Ensure market access
Market access is ensured through the purchase of members' produce, and
transportation is equivalent to the manufacturing organisation's inbound logistics
activity. The purchasing activity also includes quality control and pricing of raw
materials. The FPO's typical value-adding operations are covered by consolidation
and processing. While consolidation is concerned with bulking and storing the
produce in order to sell it at a later date for a profit, processing is concerned with
increasing the value of a product by altering its form and/or structure.
F. Develop market and buyer relation
To be a reliable market partner it is necessary to make strong and long-term
relationships with buyers of various sectors. It also requires strong contractual
arrangements and agreement with them. Market information is critical for FPOs to
make commercial decisions, as well as for transferring market signals to members to
influence production decisions and define FPO supply conditions. Small producers
were able to make strategic investments through producer organisation s to get
exposure to Agro-industrial markets where their output was more profitable by
forming more sophisticated contractual relationships with potential purchasers.
(Mbeche and Dorward 2014) [9] discovered that when new marketing opportunities
appear, individuals with more acreage, higher education, and better organisation are
better equipped to deal with the complexities of the new contractual arrangements.
1.6 Status of Farmer Producer Organisation s (FPOs) in India
The Government has started the Central Sector Scheme "Formation and Promotion of 10,000
FPOs" with a sanctioned budget lay of Rs. 6,865 crores to form and promote 10,000 new
FPOs until 2027-28. The scheme uses a Produce Cluster Area approach to form and promote
FPOs. The formation of FPOs will be focused on "One District One Product" for the growth
of product specialization while using a cluster-based approach. Each block is given one FPO
at first. So far, Implementing Organisations have been assigned a total of 4,609 fresh FPOs
produce clusters for the formation of FPOs, with a total of 632 FPOs registered.
Table 1: Detail of Producer Companies for the year 2020, state wise

State Number of Producer Companies

Andhra Pradesh 147
Arunachal Pradesh 15
Assam 87
Bihar 221
Chandigarh 1
 Chhattisgarh 32
Delhi 7
Gujarat 108
Haryana 257
Himachal Pradesh 7
Jammu & Kashmir 10
Jharkhand 70
Karnataka 195
Kerala 53
Madhya Pradesh 237
Maharashtra 1950
Manipur 26
Meghalaya 1
Mizoram 4
Nagaland 6
Orissa 177
Puducherry 1
Punjab 13
Rajasthan 114
Tamil Nadu 241
Telangana 119
Tripura 8
Uttar Pradesh 654
Uttarakhand 14
West Bengal 184
Grand Total 4959
Source: https://pib.gov.in/PressReleasePage.aspx?PRID=1739593

In India as of March 31, 2020, the country's total number of FPOs was around 4959. There
are FPOs in the country that are not yet registered, as well as FPOs that are in the process of
becoming registered. The Small Farmers Agribusiness Consortium (SFAC) promotes all
FPOs in the country, and these FPOs are financed by the National Bank for Agriculture and
Rural Development (NABARD). The technical support of the FPOs is provided by Producer
Organisation Promoting Institutions (POPIs) for the first year, after which the management of
the system is handed over to the respective FPOs' management committees. Maharashtra has
the highest number of FPO which is 1950. that comprises 25% of the whole FPO present in
India. Which consist of FPOs promoted by NABARD, Nabkisan Pvt Ltd. SFAC, MSAMB,
World bank, Japan poverty reduction fund, and self-promoted FPO, Followed by Uttar
Pradesh (654) Haryana (257), and Tamil Nadu (241). As shown in Table 1.
1.7 Status of FPOs in Maharashtra
There are 1950 Farmer Producer Organisations in Maharashtra. Their main duties comprise
identification of crops to be raised based on market demand, arranging transportation
facilities, bulk procurement of inputs and distribution among members, for produces of
member farmers in order to ensure economies of scale and elimination of middlemen in the
marketing channel. The district-wise number of FPOs in Maharashtra is presented in Table 2.
Table 2: Status of Farmer Producer Organisations in Maharashtra
Sr. No. District FPO

1. Ahmednagar 43
2. Akola 18
3. Amravati 34
4. Aurangabad 65
5. Beed 36
6. Bhandara 6
7. Buldhana 33
8. Chandrapur 3
9. Dhule 20
10. Gadchiroli 0
11. Gondia 5
12. Hingoli 13
13. Jalgaon 39
14. Jalna 24
15. Kolhapur 33
16. Latur 38
17. Mumbai City 6
18. Mumbai Suburban 30
19. Nagpur 13
20. Nanded 20
21. Nandurbar 9
22. Nashik 38
23. Osmanabad 38
24. Parbhani 17
25. Pune 85
 26. Raigad 0
28. Ratnagiri 7
29. Sangli 22
30. Satara 30
31. Sindhudurg 4
32. Solapur 38
33. Thane 5
34. Wardha 11
35. Washim 11
36. Yavatmal 27
37. Palghar 0
Source: http://erp.msamb.com/online/fpc

Out of 1950 total FPOs, 825 FPO were registered, Pune tops the list with 85 registered FPOs,
followed by Aurangabad and Ahmednagar with 65 and 43 registered FPOs, respectively. As
shown in Table 2.
1.8 Objectives of the Study
 To study the impact of government schemes on Farmer Producer Organisations in
Maharashtra.
 To identify challenges faced by Farmer Producer Organisations in Maharashtra.
1.9 Review of Literature
1.9.1 Studies on need for producer organisations
Trebbin and Hassler (2012) [10] stated that producer businesses were a means for
smallholder farmers to organise and reap benefits - not only from cooperative action, but also
from links to developing high-value marketplaces in India's cities. According to their
research, the Indian government mostly promotes private enterprise agriculture activities, but
it also strives to encourage groupings of primary farmers to link with corporate clients. The
evolution of farmer groups into more market-oriented and company forms of institutions can
be analysed through the lens of producer firms. It is a tool for smallholder farmers to organise
themselves and gain the benefits of cooperative action as well as links to developing high-
value marketplaces in India's cities.
Bhosale (2014) [11] in his research, over two lakh farmers are members of 260 FPOs
supported by SFAC. Aside from these 260 FPOs, another 350 are in the process of being
registered. According to Pravesh Sharma of the SFAC, FPOs at higher levels will be able to
take advantage of human resources expertise through recruiting specialists, as well as
technology. In 2014, SFAC would open seven state-level FPOs in West Bengal, Gujarat,
Rajasthan, Uttarakhand, and Madhya Pradesh.
Trebbin (2014) [12] in his research, stated that there is potential for producer companies in
India to become part of modern retailer supply chains, but only a few have done so far. On
the one hand, this can be linked to the producer businesses' lack of competences. A relevant
language could be inserted in the producer company legislation once it has been tested in the
field. At the same time, in order to spark the attention of corporate customers, India's food
retail legislation may in the future contain a requirement that a specific percentage of fresh
fruit be acquired from farmer cooperatives.
Harrington (2019) [13] seeks to educate industrial policies and strategies to assist the
development of nascent, developing, and mature FPOs, as well as conventional-digital FPO
capabilities in specific geographical contexts. By merging stages of emergence for FPOs and
supply networks, an Institutional-Socially Responsible Supply Network' stages' model is
established to help understand supply network evolution in terms of a portfolio of resource-
efficient technology interventions. FPOs and their network partners can examine the effects
of traditional and digital process technologies on supply network designs and business
models in various development–launch–supply scenarios in comparison to existing supply
models.
1.9.2 Studies on financial aspects of FPOs
Murray (2019) [14] in his research financed community-based agriculture projects with a
social orientation and a good commercial plan were studied. While institutions are inclined to
consider sponsoring POs, the obstacles remain considerable. Oiko Credit has a long history of
sponsoring agricultural projects (many of which are cooperatives) throughout Central Asia,
Eastern Europe, Latin America and Africa.
Joglekar (2016) [15] in his studies, there is a concern of accountability in terms of output -
the finances and agenda are provided by SFAC, but the implementation is handled by CSOs
(civil society organisation s). Another significant project is NABARD's PODF (Producer
Organisation s Development Fund), which provides funding of up to 50 crores to qualified
producer companies. This, too, is subject to the requirement that they hold the company's
assets as collateral. However, this would limit enterprises who do not have assets or are in the
early stages of establishing their business.
Singh and Pordhiya (2019) [16] stated that majority of farmers in India are concerned about
decreasing farm productivity, lower resource use efficiency and lower farm revenue. Farmer
Producer Organisation s (FPOs) work on the principle of economies of scale and collective
action and have emerged as a bright ray of hope for mitigating some of these challenges.
Taking these facts into account, this study was conducted to examine the socioeconomic and
sociopsychological characteristics of FPO members by recruiting 240 respondents from four
districts Madhya Pradesh FPOs (M.P.).
Yadav et al. (2018) [17] studied FPOs in Chhattisgarh. There main occupation were crop and
fruit production. They were taking input in wholesale rate. It was found that, Rs. 7.15 lakh
and Rs. 6.08 lakh were the average authorized capital and paid-up capital of the selected
FPOs respectively. The average contribution per member was estimated at Rs. 1110. The
average annual turnover was found Rs.15 lakh and all the FPOs were crashed in profits
(2016-17). Government support in the form of grants during the early stage the PCs should be
made available.
2 RESEARCH METHODOLOGY
2.1 Research Design
Descriptive research design was used to attain the objectives of the study.
2.2 Area of Study
Maharashtra is a state in western India that covers maximum area of the Deccan Plateau.
Maharashtra is India's second most populous state. Maharashtra is India's third-largest state
by area, covering 307,713 km2 (118,809 sq. mi). its primary source of income is agriculture.
In the state, both food and cash crops are grown. Rice, jowar, bajra, wheat, pulses, turmeric,
onions, cotton, sugarcane, and a variety of oil seeds such as groundnut, sunflower, and
soybean are among the most important crops. The state has vast areas dedicated to fruit
farming, with mangoes, bananas, grapes, and oranges being the most popular.
2.3 Collection of Data
2.3.1 Primary data
Primary data was gathered by conducting surveys in the study locations. The research was of
survey type and so immense importance was given to the technicalities of constructing
schedule, sampling method, and interviewing the respondents (Farmer Producer
Organisation).
2.3.2 Secondary data
Collection of secondary data was done from records maintained by NABARD, Small
Farmers Agribusiness Consortium (SFAC), and Producer Organisations Promoting
Institutions (POPI) of the concerned FPOs regarding details of FPOs. Besides these,
magazines, journals, books, papers, and the websites of numerous departments and institutes
were also used as sources.
2.4 Sampling Units
a) FPO – 20
b) FPO officials - 20 (1 from each FPO)
c) FPO Farmers - 100 (5 from each FPO and 25 from each district)
2.5 Selection of Sample and Data Collection
2.5.1 Selection of districts
Out of 36 districts in Maharashtra, Ahmednagar (43), Aurangabad (65), Jalgaon (39), and
Pune (85) were selected purposively for the study on the basis of the presence of the
maximum number of FPOs in the states as these districts had approximate 30 percent of the
total FPOs in the state.
2.5.2 Selection of FPOs
From selected districts, 5 FPOs were selected from each district for study purposes. The total
number of FPOs constituted 20. The selection of FPOs was based on the following
assumptions:
a) FPOs selected were of more than two years after the establishment;
b) Operation was considered from production to marketing and
c) The FPOs selected should be dealing with a minimum of two commodities
2.5.3 Selection of FPO CEOs and FPO members
Each FPO had one respondent chosen at random. In order to highlight issues faced by Farmer
Producer Organisation s, an additional 5 farmers from each of these FPOs' operating areas,
who are FPO members, were conveniently picked. The participants were chosen with great
care to ensure that each category contained the same sort of farmer in terms of cropping
pattern, land holding, and other factors, avoiding the problem of extreme variables and
outliers.
2.6 Data Analysis
Objective I: To study the present scenario of Farmer Producer Organisations in Maharashtra
The objective is designed to identify the present scenario of FPO by using the following
operational aspects
1. Area of operations
2. Number of members
3. Years of establishment
4. The commercial activities of FPO and the primary crops that FPOs in the study area is
dealing with and
5. Financial aspect of FPO
Objective II: To study the impact of government schemes on Farmer Producer Organisations
in Maharashtra
The Objective is designed to analyse the impact of government schemes on Farmer Producer
Organisations in Maharashtra. There are different agencies promoting FPOs. Such institutions
are generally called Producer Organisations Promoting Institutions (POPI). There are
different institutions in the state for promoting the FPOs and giving training to the members
in managing their FPOs. The Institutions promoting the FPOs in the state will be identified. A
schedule was prepared for the FPO people to know awareness regarding the government
schemes and policies. Along with this before and after the adoption of the scheme were
analysed.
Objective III: To identify challenges faced by Farmer Producer Organisations in Maharashtra
This Objective is designed to identify challenges faced by Farmer Producer Organisations. A
structured schedule was prepared for farmer members before going to the field for collecting
Data. Proper measures were taken while constructing a schedule that motivate farmers for
giving the correct information which is desired by the researcher.
The Rank Based Quotient (RBQ) technique was used given by Sabarathnam (1988) to rank
these issues according to their severity.
Where,
fi = Number of farmers’ responses for a particular factor under its rank
N= Number of farmers
i = Number of rank
n = Number of factors identified
3. FINDINGS AND ANALYSIS
3.1 Impact of Government Schemes on Farmer Producer Organisations in Maharashtra
This objective shows, what effect the Government schemes have brought in the functionality
of FPO by any means, be it monetarily, be it by adding members to the FPO, or by benefiting
through government policies.
3.1.1 Awareness of government schemes and benefits by FPO
The Government of India has many institutes which help the FPO by promoting them and
providing them services like giving them loans, and subsidies to help in building
infrastructure by funding the FPOs. this study shows how many of the selected FPO are
aware of the government schemes and policies. The major institute which provides help or
support to FPOs are SFAC, NABARD, and World bank. The other institutes are private like
NGO, Private financial institutes, and funds coming from foreign countries (Japan Poverty
Reduction fund).
Table 3: Awareness of government schemes and benefits by FPO

Still
Name of Governmen Aware of Got
Sr.no Getting
FPO Agencies Schemes Benefited
Benefiited

Ahmednagar

Amarsingh
agro
Not getting
1 producer MACP Aware Benefited
benefitted
company
limited

Unity agro
farm Not- Not getting
2 Self-promoted Aware
producer benefited benefitted
company
 limited

Real agro
farmers
producer Not- Not getting
3 Self-promoted Aware
company benefited benefitted

limited
Seven hills
farmers
producer Not- Not getting
4 Self-promoted Unaware
company benefited benefitted

limited
Mula valley
farmer
Getting
5 producer NABARD Aware Benefited
benefited
company
limited

Aurangabad

Krishi
pratishthan
producer WORLD Not getting
6 Aware Benefited
company BANK (ATMA) benefited

limited
Bhagwan
krushi
producer Getting
7 World Bank Aware Benefited
company benefited

limited
Mandana
producer Getting
8 company World Bank Aware Benefited
benefited
limited
Latifpur agro
producer Not- Not getting
9 company Self-promoted Aware
benefited benefitted
limited
Lingdari
farmers
producer Not getting
10 Dilasa NGO Aware Benefited
company benefitted

limited
Jalgaon
Nav
chaitanya Japan Poverty
Getting
11 farmers Reduction Aware Benefited
benefited
Fund
producer
 company
limited
Aadishakti
muktai
krushi vikas
farmers Not- Not getting
12 Self-promoted Unaware
producer benefited benefitted
company
limited
Girna
farmers
producer Getting
13 NABARD Aware Benefited
company benefited
limited
Tapi valley
agro Japan Poverty
producer Getting
14 Reduction Aware Benefited
company benefited
Fund
limited
Dhartiputra
agro Japan Poverty
producer Getting
15 Reduction Aware Benefited
company benefited
Fund
limited
Pune
Shree
satwajibaba
agro Getting
16 producer SFAC Aware Benefited
benefited
company
limited
Fresh
express Not- Not getting
17 farmer Self-promoted Aware
benefited benefitted
producer
company
limited
Versatile
agrofirst
farmer Not- Not getting
18 producer SFAC Aware
benefited benefitted
company
limited
Rajuri agro
producer Not- Not getting
19 company Self-promoted Aware
benefited benefiting
limited
 Vasundhara
agri-horti
producer Not getting
20 NABARD Aware Benefited
company benefitted

limited
Source: Researcher’s own computation

Table 3 shows that the FPO from all 4 districts of the study area 20 FPO were taken into
consideration about awareness of government schemes and policies. Where the responses
came in the close-ended format, further the responses are shown in the form of a clustered bar
to explain them more easily.

100%
2
90%
80% 7
70% 12
60%
50%
18
40%
30% 13
20% 8
10%
0%
Aware/Unaware Benefiting /Not Benefiting Regularly Getting Benefited
/ Not Getting Benefited

Yes No

Source: Researcher’s own computation

Figure 1: Graphical Representation of Awareness and Benefits of Government Schemes

Figure 1 shows the detailed description of awareness and benefits of government schemes,
out of 20 FPOs 90% of FPOs knew about the government schemes and they were getting the
benefit of it. The remaining 10% of FPOs have no idea about government schemes. these
FPOs were self-promoted FPOs, they contributed the capital by their own members and
established the FPO on their own. Furthermore, only 65 % of FPOs benefited from the
government schemes and the remaining 35 % are not benefited from the government
schemes. This is because most of them were Self-promoted FPOs and they have established
their FPO on their own because they find the government work slow, time taking and they go
through many documentations process which is time-consuming. And, out of this decrease in
the number of FPO who are still getting the benefit of government schemes and policies are
40 % FPOs. These 8 FPOs are still getting the benefits of the schemes and policies provided
by the government agencies and were aware of the new schemes and policies that came into
the act with respect to FPO interests. The remaining 5 FPO which used to get the benefits
before but had stopped getting them now provided us with the reason for lengthy document
processing, time-taking procedures, and filing of the audit report according to the scheme’s
terms and conditions.
After taking the benefit from the schemes given by the government, changes occurred in the
functionality and economy of the FPO. Listed down below are the names of the FPOs who
got benefited from the government schemes and policies.

Table 4: Impact of government schemes on FPO

Govern Technical,
Name ment Technological & Financial
District agenci Infrastructural
of FPO benefits
es benefit
Before
Adopti After Adoption
on

Amarsingh
MACP No cleanin Cleaning,
agro
Governed g and grading
producer -
by World grading units &
company
Bank unit Training
limited

Ahmed
nagar Helped
Mula valley establishin
farmer Produc e g FPO, Funding 5
producer Fund by - lakh for 3
company NABAR D salaries of years
limited CEO &

training

Krishi
Funded for
pratishthan Poor 50% of
ATMA by new
producer processing expenditure
World bank processing
company unit subsidised
unit
limited

Bhagwan
Aurang krushi
abad Funded for
Poor 50% of
ATMA by new
producer processing expenditure
World bank processing
company unit subsidised
unit
limited

Mandana Poor New

50% of
producer ATMA by wheat Wheat
expenditure
company World bank proces processing
subsidised
limited sing unit
 New
Lingdari
establishm
farmers Dilasa
ent of FPO
producer Janvika s - &
-
company Pratishthan
Technical
limited
training

Nav Providing
chaitanya Japan lone for
farmers poverty establishment
producer reducti on
- - &
company fund improvement
limited of FPO

Helped
Girna
establishin
farmers Produc e Funding 5
Jalgaon g FPO,
producer Fund by - lakh for 3
salaries of
company NABAR D years
CEO &
limited
training

Providing
Tapi valley
Japan lone for
agro
poverty establishment
producer - -
reducti on &
company
fund improvement
limited
of FPO

Providing
Dhartiputra
Japan lone for
agro
poverty establishment
producer - -
reducti on &
company
fund improvement
limited
of FPO
 Training
and
Lack of
Exposure 5-15 Lakh of
Shree SFAC Fund And
of new Funding
satwajibaba training
farm
agro technology
producer
company
limited

Versatile Training
Pune agrofirst and
Lack of
farmer Exposure 5-15 Lakh of
SFAC Fund And
producer of new Funding
training
company farm
limited technology

Helped
Vasundhara
establishin
agri- horti Produc e Funding 5
g FPO,
producer Fund by - lakh for 3
salaies of
company NABAR D years
CEO &
limited
training

Source: Researcher’s own computation

Table 4 is the summary of the total objective in which there are schemes provided by the
government and the FPOs which have benefitted from them. This table also shows the before
and after adoption scenario of the FPO which directly relates to the impact which the
government schemes have done on FPO functional and economic areas.
3.2 Challenges Faced by Farmer Producer Organisations in Maharashtra
FPO farmer members were interviewed as part of a focus group. A pilot study was conducted
to identify the primary obstacles that are holding the FPO idea back in Maharashtra.
The following were the primary issues identified:
1. Lack of technology
2. Lack of office building of its own
3. Lack of godowns/storage facilities
4. Problems obtaining appropriate financing on time
5. Inadequate contribution from members, as the majority are impoverished and unemployed
6. Lack of vehicles for transportation
7. Market at a distance
Data was collected from on the districts based on the primary problems mentioned in order to
rate the problems by severity. These issues were ranked according to their severity using
Sabarathnam's Rank Based Quotient (RBQ) technique (1988). Here the factor taken were 7,
number of farmer as a sample size were 25 which is 5 from each FPO which are selected on
random basis .
RBQ mean= ∑fi(n+1-i)*100/N*n
Where,
fi = Number of farmers response for particular factor under its rank
N= Number of farmers
i = Number of ranks
n = Number of factors identified .
4.2.1 Challenges faced by the FPOs in Ahmednagar district
Five FPOs from the Ahmednagar district were chosen to study the district's significant
challenges. The respondents were chosen at random from among the FPO farmer members.
During the pilot survey, the key issues were identified. Table 5 shows the final outcome.
Table 5: Challenges faced by the FPOs in Ahmednagar district

Challenges RBQ Mean Rank

Inadequate contribution by member 81.71 I

Inadequate finance on time 76.57 II

Distant market 59.42 III

Lack of transport 58.28 IV

Lack of technology 52.00 V

Lack of storage 45.14 VI

Office building of its own 26.85 VI

Source: Researcher’s own computation

Table 5 shows that the major problems faced by the FPO of Ahmednagar district. Out of 7
identified problems, the major problem identified is the inadequate contribution of farmer
members as the majority are impoverished and unemployed. While studying these problems
this factor was the most significant in the Ahmednagar district. The RBQ mean of this
problem was 81.71. The next was inadequate finance on time which has the RBQ mean of
76.57. It is because the majority of farmer members were of marginal and small scale. The
next main problem was the market at a distance which the farmer member has kept in 3rd
rank of 59.42 RBQ mean. The other major problems of the districts were lack of transport,
technology, storage and office building of its own which ranks IV, V, VI and VII
respectively.
3.2.2 Challenges faced by the FPOs in Aurangabad district
5 FPOs from the Aurangabad district were chosen to study the district's significant
challenges. These issues were ranked according to their severity using Sabarathnam's Rank
Based Quotient (RBQ) technique. The responders were chosen at random from among the
FPO farmer members. During the pilot survey, the key issues were identified. Table 6 shows
the final outcome.
Table 6: Challenges faced by the FPOs in Aurangabad district

Challenges RBQ Mean Rank

Inadequate finance on time 85.14 I
Inadequate contribution by member 72.57 II
Lack of technology 63.42 III
Lack of storage 51.42 IV
Office building of its own 43.42 V
Lack of transport 42.85 VI
Distant market 42.28 VII
Source: Researcher’s own computation

Table 6 shows that inadequate availability of finance on time and inadequate contribution by
the farmer member of FPO with the RBQ mean scores of 85.14 and 72.57 were the most
significant problem in Aurangabad district. The next most serious issues were lack of
technology, storage and an office building of its own, with the RBQ mean of 63.42, 51.42
and 43.42. The FPO members in this district were least affected by issues such as a lack of
transport because the market was nearby due to which the transport was easily available.
3.2.3 Challenges faced by the FPOs in Jalgaon district
During the collection of data, measure was taken that the data which was collected is from
the FPO’s farmer members in which there are members of different age group and having
different educational knowledge, which totally reflects the variety in challenges faced by
them. 5 FPOs from the Jalgaon district were chosen to study the district's significant
challenges from which 25 respondent were selected randomly.
Table 7: Challenges faced by the FPOs in Jalgaon district

Challenges RBQ Rank

Mean
Lack of transport 87.42 I
Distant market 65.14 II
 Inadequate contribution by member 61.71 III
Lack of technology 61.14 IV
Inadequate finance on time 60.00 V
Lack of storage 46.28 VI
Office buildings of its own 18.28 VII
Source: Researcher’s own computation

Table 7 shows that the district’s FPO was facing the major challenge of vehicles for
transportation and resembling the same problem one was a distant market. Both problems are
interrelated. If the market is at distance similarly the transportation problem emerges. The
RBQ mean of both the challenges were 87.42 and 65.14. The next severe issue the Jalgaon’s
FPO were facing was inadequate contribution by the FPO member because of some poor
farmers were not able to give an equal share. The RBQ mean of this was 61.71. The other
issues were inadequate finance on time, lack of storage space, and office building of its own.
3.2.4 Challenges faced by the FPOs in Pune district
Five FPOs from the Pune district were chosen to study the significant challenges of the
district. The responders were chosen at random among the FPO's farmer members. During
the pilot survey, the key issues were identified. Table 8 shows the final outcome.
Table 8: Challenges faced by the FPOs in Pune districts
Challenges RBQ Mean Rank
Lack of storage 82.28 I

Office buildings of its own 76.57 II

Inadequate finance on time 61.71 III

Lack of transport 61.14 IV

Distant market 45.14 V

Inadequate contribution by member 41.14 VI

Lack of technology 34.28 VII

Source: Researcher’s own computation

Table 8 shows the challenges faced by the FPO in Pune district. The major challenges faced
by them are lack of storage, not having their own building and inadequate finance on time.
With the limited land holding near Pune city and the high prices of the land it’s hard for the
FPOs of Pune districts to get a storage facility and an office of their own to work. These
challenges rated with in the top 3 with the RBQ mean of 82.28, 76.57 and 61.71 respectively.
Lack of transport and distant market are interrelated to each other, if the vehicles are not
available then transportation will be hard to take the supply to the market, which is at a
distant from the storage place or godowns.
3.2.5 Comparative study of challenges faced by FPO in Maharashtra
The comparative study of FPO of Maharashtra from the selected 4 districts will tell us that
the challenges faced by the FPO are severe and can be compared with the other districts.
These are calculated by RBQ mean method. The study is shown below in figure 2.

100
90
80
70
RBQ Mean

60
50
40
30
20
10
0

Challenges

Ahmednagar Aurangabad Jalgaon Pune

Source: Researcher’s own computation

Figure 2: Comparative study of FPOs in Maharashtra

Figure 2 shows that lack of technology is highest in Aurangabad and Jalgaon district with the
RBQ mean of 63.42 and 61.14 respectively. Whereas the office building of their own is the
least problem among all the district except Pune where the RBQ mean is raised up to 76.57.
In the same district the major problem before having their own office building is lack of
storage system. This is major in Pune district with the RBQ mean of 82.28. Inadequate
finance in time and inadequate contribution by member as many of them are poor these two
challenges were at the top of 2 districts in Aurangabad and Ahmednagar whereas lack of
transport and distant market were the challenges faced by the FPOs of Jalgaon districts with
the RBQ mean of 87.42 and 65.14 respectively.
4. CONCLUSION
The conclusion is based on the findings and discussions. It has been found that there were 4
producer organisation promotion institutes and one non-governmental organisation to set up
20 FPOs. The majority (46%) were promoted through the NABARD Produce Fund and
World Bank scheme. As a result, NGOs and other associated organisations must take the
initiative to educate rural communities about the benefits of FPOs and promote them. Crop-
wise classification of FPOs in the study area was studied and the majority of crops were
onion, pulses, and other vegetables made up the majority of the FPOs. For increasing the
profit in crop production, the FPO needs to gain more knowledge in mixed cropping and
allied agriculture practices. The research also concluded that 2 FPOs have the maximum
financial turnover of 66.66 % whereas the least turnover counted at 11.11%. The FPO with
the maximum turnover is can grow in the field of technology and automation. New advanced
technology should be used in the value addition and packaging and processing units to
increase the value of your product. This will help to gain more profit as the return will
equally change the living of the individual. Government schemes and policies are doing for
what they were meant but still, farmers are so much friendly as feel easy to avail them. Apart
from all these betterment schemes have also helped monetarily by giving loans, providing 50
% of project expenditure, and funding the FPOs for the establishment and improvement.
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