Monday, December 14, 2015

FARMER /HORTICULTURIST SPECIAL..................Higher-Hanging Fruit

Higher-Hanging
Fruit


How Karnataka's horticulture department is turning the farmer into
a horticultural entrepreneur with help from the Central and state
 governments as well as the private sector
WHY CAN’T MAHARASHTRA GOVERNMENT SEE ITS 
FEASIBILITY?

With farmers' suicides in Karnataka touching 800, the highest ever in the
 state, the government is quickly pushing through an initiative to promote 
cash-rich horticulture farming by linking up the poor and marginal farmer
 directly to private companies that deal with agri-produce.
Using a programme devised by the Congress-led United Progressive 
Alliance (UPA) in its second term for integrated agriculture development
through private -public-partnerships (PPP-IAD), the state's horticulture dept.
dovetailing state, central and corporate initiatives to turn the farmer into a
horti-business entrepreneur.While all of the commercial crop sector will be
covered, coconut is top priority and pomegranate the least, based on how
 much value can be added to the product. “We grow 40,000 hectares of
potatoes in Karnataka. A tie-up with ITC (which manufactures Bingo)
and Pepsi (Lays) can take care of our entire potato crop,“ Rajeev Chawla,
Karnataka's principal secretary, horticulture, told ET Magazine.
Karnataka, with lakhs of small and marginal farmers, has the third largest
 area under horticulture crop in the country. It is the seventh in production.
 The state is the highest exporter of cashew, roses, gherkins, rose onion,
spices and condiments, earning a whopping `8,453 crore annually.
Tomatoes grown in Kolar travel all the way to Kolkata for sale, while
lemons from Bi japur are sold in Bihar. Income generation from the sector
 is `36,000 crore. Still, Chawla sees a vast, untapped market for horticulture
 crop and value-added prod ucts from the state. “Why can't the extra spicy
Byadgi chilli become as famous as Mexican chilli?“ he asked. The area
that the state wants to fix is the 20 to 25% post-harvest losses in the sector.
The idea is to find value additions to the horticulture produce that will use
up the highly perishable items without causing any loss to the farmers.
They want to do this by facilitating private intervention, rather than set
minimum support prices for all products. Chawla pointed out that the
government-sponsored HOPCOMS (Horticultural Producers Cooperative
Marketing and Processing Society Ltd), which purchases vegetables and
fruits from the farmers and sells them to consumers through stalls, covers
hardly 3% of the 12,000 tonnes consumed in Bengaluru city.
Government Intervention
The horticulture department has studied several models including the
PPP-IAD implemented by Maharashtra, which began functioning in 2012.
Karnataka is also looking to scale up through government intervention
two private, successful models in horticulture. The sale of vegetables
from groups of farmers through linked-up groups of vendors under the
Samriddhi brand by IIM-A alumnus Koushalendra Kumar in Patna is
one model the state wants to replicate. The other is that of the
Siddhivinayak group in Maharashtra, where everything from seeds
to modern, efficient technology to turning of the grown potato crop
 into chips and their sale is handled by the company, through agreements
with farmers.
Here's how the Karnataka model, inspired by those from the other states,
works: about 20 farmers first get together and form an interest group.
About 50 such groups join together and register a farmer producer
organisation (FPO) under the Companies Act, complete with a board
of directors with two representatives from each interest group. The FPO
is adopted by either the Indian Institute of Horticulture Research or the
University of Horticulture Sciences, Bagalkote, which provides technical
support. The government pitches in by paying for a technically qualified
chief executive to run the FPO as management support for a period of
three years. Besides this, the government gives the FPO members all the
subsidies provided in the sector and `90 lakh towards permanent
infrastructure such as cold storages, on the condition that the FPO puts
 in `10 lakh.
The state is expecting a range of compa nies, including the Big Four
consulting firms like PricewaterhouseCoopers and Ernst & Young, to
come forward to bid for tenders to provide manpower to support this
project on the marketing, BPO and IT side. The government is likely
to give each FPO seed money of `25 lakh, while the centrally funded
Small Farmers Agriculture-Business Consortium (SFAC) will give an
equity linked grant of `10 lakh that the state will facilitate.Besides this,
NABARD is committed to give each FPO `5 lakh.
The FPO draws up a detailed project report with help from the horticulture
department and focuses on a specific area.For example, Yogananda of
the alreadyregistered FPO in Chikkamagaluru district, told ET Magazine
that their FPO will focus on vegetables including toma to, potato, cabbage,
 beans and green chillies. And they are planning a cold storage to store
them and sell them to FPOs in districts that don't grow vegetables, or to
 other private outlets.
“Farmers are not getting good prices, so these FPOs that we have formed
among ourselves are a very good idea to ensure that we don't suffer.
The FPO will get fertilisers and pesticides at cost and sell them to all of us
 shareholders, who have paid `1,100 to join it, at cost. We will also get all
 benefits and no taxes. There will be no intermediaries and we will sell
directly to the consumers or the company that links up with us , “ Yogananda
 explained.
The state is aiming to register 92 FPOs this fi nancial year and get them
off the ground.
The horticulture depart ment insists that the FPO model will work better than
the coopera tives that have been racked with politics and power play.
Yogananda pointed out that he was a BJP supporter, but Congress and JD(S)
farmers were also present in his F P O.
Rudresh, a director of another registered FPO in Davanagere district, said:
“Politics may come in at some point, but currently, we are all just farmers
who are working together for the welfare of all. We can plan who will put
what crop and work out benefits for every one. As an initiative, this FPO
idea is very good and can work at the ground level.“
The government is further incentivising FPOs by giving them trader
licences in the agriculture produce market committee (APMC) markets
that sell agriculture prod ucts in each district. The FPO can itself sell to
consumers directly at these markets without going through any agents,
as they are a group of farmers and not individuals. The FPOs also get
storage space in all APMCs.

IT Support
All FPOs will be linked up through a database that can be accessed by any
 company which wants to work with them. The horticulture department
will identify five local resource persons who will geo-map the land owned
or leased or used by each FPO member. There will be constant updates in
all the project area and at any point in time, the state of the land, the
fertilisers that have been used, the state of the crop and how it is progressing
 towards harvest, can be accessed at fingertips.
“A package of practices, which is a set of prescribed practices like the seeds,
 pest and disease details, pesticides and fertilisers and so on, recommended
by University of Horticulture Sciences, Bagalkote will be given to the
farmers. These will be monitored at every step through an app, developed
 for the purpose,“ Kshama Patil, deputy director of horticulture (project
monitoring unit), told ET Magazine.
Chawla has written to several companies that linked up with the contract
farmers in Maharashtra and other states, besides all food processing majors
and super-markets including Hindustan Unilever and Metro Cash and Carry,
inviting them to attend a workshop on the project and begin the linkage
process. “The companies can directly link up with the FPOs and control
the whole process of growing their raw material, like providing the seeds,
the fertilisers, the know-how and finally purchase the product.
However, unlike contract farming, if the farmers want to sell the produce
to someone else who will give them a better rate, they are free to do so.
They are not bound to the company. So the company will have to pay
them market rates,“ Chawla explained.
Prabhakar Rao, trustee of the Sri Sri Institute of Agricultural Sciences
and Technology Trust, said he has expressed interest in attending the
workshop. “I believe the PPP-IHD model has great potential as
demonstrated by the Sri Sri Farmers Markets we have going in Madhya
Pradesh. It is fully run by The Art of Living as a direct linkage between
farmers and consumers. With government support, we believe that there
 is tremendous potential to take it further,“ he told ET Magazine in an
emailed response. Hemant Gaur, managing director of Siddhivinayak
Agri Processing, pointed to the success of his model in Maharashtra,
where everything from seeds to the final marketing of potatoes was done
 by his company, benefitting everyone along the line. “I don't believe
that the middleman or the dealer has managed to make a lot of money
between the consumer and the producer as, if that was the case, the
middleman should now be very rich. That has not hap pened.
But what we are looking at is control of the quality of the product that
we deliver to the consumer and, for that, this system is very effective,“ he said.
Sowmya Aji
ETM29NOV15

















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