FPO / Producer Company
Producer Company" means a body corporate, of the nature of an unalterable and deemed private company comprised of any number of shareholders, having the objects or activities specified in section 581B and registered as a Producer Company. Part IXA provides for the formation of Producer Companies engaged in dealing with primary produce on co-operative principles.
FPCs are based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity. FPC members must believe in the ethical values of honesty, social responsibility and caring for others.
Principle-1
FPCs are voluntary organizations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination.
Principle-2
FPCs are democratic organizations controlled by the farmer-members who actively participate in setting the policies and making decisions having equal voting rights.
Principle-3
Farmer-members may contribute equally, and anyway democratically control the capital of their FPC. FPCs serve their members effectively and governance by contributing towards development of social capital and local governance capabilities.
Principle-4
FPCs are autonomous, self-help organizations controlled by their farmer-members. If they enter into agreements with other organizations, including governments, or raise capital from external sources, they do so on terms that ensure their FPC's autonomy.
Principle-5
FPCs operatives provide education and training to the farmer-members, elected representatives, managers, and employees so that they can contribute effectively to the development of the FPOs.
Principle-6
FPCs work for the sustainable development of the communities through policies approved by their members.
The important characteristics of a producer company may be viewed in terms of:
The World Bank had initiated the FPC development approach through a coordinating platform namely an Agri-Business Promotion Facility (ABPF). The FPC development approach in this context may be viewed as depicted below :
Under the activity, cluster areas are to be selected by the ABPF in consultation with the respective State Government departments. For example, a cluster of 8,000-10,000 farmers may be identified, within one or two blocks, identifying 80 to 120 contiguous villages of a particular district.
Diagnostic Study may be conducted by the ABPF in selected cluster areas. The Diagnostic Study is conducted to assess the preliminary situation of the farmers and level of agriculture in the area. The study will also help in identifying the potential interventions required and understand the specific project implementation context.
Feasibility Analysis for the formation of FPCs is carried out by the ABPF. A normal feasibility study should cover aspects such as financial, technical, legal, socio-cultural, environmental, and economic and resource feasibility. The Feasibility Analysis will establish a case for promotion of FPCs in the prevailing specific regional environmental context. Mobilisation of members and selection of Board of Directors may be undertaken at this stage.
Business Planning will be carried out by ABPF with the help of selected farmers' representatives. Business planning is a process through which the strategic and operational orientation of an emerging FPC is shaped. A business plan with proper projections on various aspects needs to be developed. The key is to develop business plans in detail with the Board of Directors and with most of FPC farmer members, to provide clear vision.
Prior to launching the activities of an FPC, all required resources should be mobilised with the help of FPC representatives and Board of Directors. Financial, human (staff), technical and physical resources should be developed during this particular step. Based on the business plan the ABPF should liaise with various financing agencies and mobilise resources for hiring/purchasing and developing various resources.
Business operations is the commencement of procurement, production, processing, marketing and other service activities of a FPC. ABPF need to carefully train both the governing and operational team of the FPC in order to ensure smooth functioning of business operations. The entire value-chain related to various agriculture and allied products and commodities needs to be managed.
