CHAPTER 1- INTRODUCTION

In comparison with many other countries, the transformation of the agrofood system in India

started relatively late. Here, the corporatization of retail, and later of agriculture, started from

1991, when the Indian government started to deregulate and liberalize the economy. A major

focus in political strategies has been placed on economic, trade, and industrial policies. This has

had, and continues to have, a particular impact on India's population in the nonindustrialized

sectors, such as agriculture. The deregulation and the subsequent decline in state subsidies for

production inputs such as water, electricity, fertilizer, and seeds created an economic

environment of unknown competition for many smallholders (Motiram and Vakulabharanam,

2007; Sharma, 2007)

At the same time, the Indian market environment changed also affecting smallholder farmers.

Along with changing consumer demands, new corporate actors are entering Indian agrofood

networks, such as corporate retailers, processors, or exporters of quality produce. These firms are

often aiming to execute vertical coordination in their supply chains, which ensures them greater

control over the production processes and thus to source produce which meets their strict

requirements and standards (Barghouti et al, 2004). Within the frame of vertical coordination,

links between farmers and buyers are becoming tighter to replace conventional open-market

relations (Humphrey and Memedovic, 2006). This type of procurement organization is also the

result of the changing national policy orientation in India, following somewhat neoliberal

tendencies, which is also affecting agriculture and trade (Landes, 2008; Pitale, 2007). However,

the Indian government not only aims to initiate new organizational forms in agricultural

production and marketing to integrate large firms, but also aims to encourage groups of small-

scale primary producers to connect with corporate buyers. With the amendment of the

Companies Act 1956 in 2002, the Indian government introduced Farmers' producer companies in

India. A new concept for collective action. Producer companies can help smallholder farmers

participate in emerging high-value markets, such as the export market and the unfolding modern

retail sector in India. As elsewhere in the developing world, in India, small farmers' livelihoods

are being threatened due to the liberalization and privatization of Indian agriculture and the

increasing interest of private capital in the agribusiness sector. The withdrawal of the state from

productive and economic functions, and changes in the organization of marketing channels,

present new challenges for small-scale farmers. In this environment of greater instability and

competition, organization and collective action can help to enhance farmers' competitiveness and

increase their advantage in emerging market opportunities. India introduced the concept of

`producer companies', which constitute an attempt to establish basic business principles within

farming communities, to bring industry and agriculture closer together, and to boost rural

development (Kumar Sharma, 2008). Farmers' producer companies can be seen as hybrids

between private companies and cooperative societies. The producer-company concept is aimed

to combine the efficiency of a company with the `spirit' of traditional cooperatives. Producer

companies aim to integrate smallholders into modern supply networks to minimizing transaction

and coordination costs, while benefiting from economies of scale (Lanting, 2005). They are run

and owned by farmers, financially facilitated by the government or donor agencies, and managed

by professionals.

Table 1: Services provided by Farmers producer organizations

Organizational services organizing farmers, catalyzing collective action, building (strategic)

capacities, establishing internal monitoring systems

Production services input supply, facilitation of (collective) production activities

Marketing services transport and storage, output marketing, processing, market

information and analysis, branding, certification

Financial services savings, loans, and other forms of credit, financial management

Technology services education, extension, research

Education services business skills, health, production

Management of resources Water, Soil conservation

*Source: (anika trebbin, 2011)

The primary goal of producer companies is to link smallholders to markets. Therefore, they

predominantly work on the downstream end of the production system . The benefits of the entire

concept, however, can be seen both on the supply side as well as on the demand side of the

market. Individual smallholders would be unable to deliver directly to and interact with large-

scale customers. The producer company organization replaces intermediaries between market

participants. Through this, profits which otherwise would be paid to intermediary organizations

such as wholesalers are captured by the farmers themselves because they are shareholders in the

producer company. In addition, through the collective market appearance, smallholders are able

to access market information in terms of required standards and prices and to integrate this

information into their production planning and methods.

Table 2: Field of assistance from producer companies (PCs) to farmers

Field Assistance Small Holder Farmers Producer company

Marketing Small Volumes, Limited bargaining

Power

Aggregation & Marketing

Market Information Limited access, but increasing due to penetration of mobile phones

Direct Linkage between PC and potential buyers

Transportation Costly, Time consuming Transportation is organized

within/Facilitated by the PC

Cold Storage No facility Set up cold /ripening

chambers

Extension services No access Farmer’s education and regular training sessions

from farmer to farmer, preservation of traditional farming practices

Input supply Need to but in the market, Credit

problem

Provided by the PC at

lower than market price through bulk buying

Production Planning Short time Horizon Constant information flows

of market processes to the farmers allow a more systematic planning

approach

Excess Production Branding Risk of distress sale Further processing,Valu addition brands might be

introduced by the PC or the buyer

*Source: (anika trebbin, 2011)

Producer companies are also implementing programs to upgrade farmers' production methods. In

particular, production organization, production planning, and knowledge and technology

transfers are critical aspects increasing the chances for farmers to work profitably and, therefore,

to enhance their livelihoods. This also involves the timely supply of production inputs, such as

seeds and fertilizer. These inputs are procured centrally in bulk, and can therefore be supplied to

farmers at lower cost. This procurement and supply of inputs also includes the organization and

facilitation of finance credits to farmers to allow such procurement. With these activities listed in

table 2, producer companies cover much of the services which farmer organizations generally

provide for their members (Table 1). This is an important aspect, because it means that

concentrating on generating a profit in a market does not mean that an organization cannot be of

greater service to its members, the community, and the environment. As such, producer

companies prove that organizations beneficial to the public need not necessarily be nonprofit

organizations

1.2 Purpose of the study

The Purpose of the study included the following:

To understand the current status of producer companies in terms of management

functioning and structure of ownership

To analyze the business performance produce companies on various business parameters.

To identify critical gaps in management of producer companies and suggest possible

mechanisms to address the constraints

1.3 Study Methodology

The methodology of this study includes survey and case studies. Combination of these methods

has simplified the understanding of Organizational functioning, Management Structure,

Ownership, Promoter institution and various operational processes across different commodities..

Criteria for sample selection:

Producer Company must be active and currently operational.

Completer Registration process

Various other factors like geographical area, number of members, type of ownership &

promoter institution.

Only Famer’s producer organization was included into sample in order to have uniformity in

comparisons and understand the dynamics of such entities. Due to this the problems and

challenges identified can be addressed with same sets of recommendations to various FPO’s.

CHAPTER -2 STUDY AREA

The area selected to conduct study was in Maharashtra state. Around Six FPO’S were visited and

studied. The FPO’s were located into different districts of the state Maharashtra. The following

tables provides a clear picture of location and name of the FPO:

Table 3: Mapping of FPO in Maharashtra State

Table 4: Name of the PO and location

Name of the PO Location

Devnadi Valley Agricultural producer company Nashik

Green Vision Farmer’s producers company` Nashik

Baliraja Krishak Farmers producer company Aurangabad

Name of the PO Location

Nisarg vikas producer company Beed

Jay Lakshmi farmers producer company Latur

Sant Anna Maharaj farmers producer company Latur

CHAPTER-3 Literature Review

3.1National Policy on FPO

Collectivization of producers, especially small and marginal farmers, into producer organisations

has emerged as one of the most effective pathways to address the many challenges of agriculture

but most importantly, improved access to investments, technology and inputs and markets.

Department of Agriculture and Cooperation, Ministry of Agriculture, Govt. of India has

identified farmer producer organization registered under the special provisions of the Companies

Act, 1956 as the most appropriate institutional form around which to mobilize farmers and build

their capacity to collectively leverage their production and marketing strength.

3.1.1Vision

To build a prosperous and sustainable agriculture sector by promoting and supporting member-

owned producer Organisations, that enable farmers to enhance productivity through efficient,

cost-effective and sustainable resource use and realize higher returns for their produce, through

collective action supported by the government, and fruitful collaboration with academia, research

agencies, civil society and the private sector.

3.1.2 Mission

To promote economically viable, democratic, and self-governing Farmer Producer

Organizations (FPOs)

To provide support for the promotion of such FPOs by qualified and experienced

Resource Institutions

To provide the required assistance and resources – policy action, inputs, technical

knowledge, financial resources, and infrastructure – to strengthen these FPOs.

To remove hurdles in enabling farmers’ access the markets through their FPOs, both as

buyers and sellers.

To create an enabling policy environment for investments in FPOs to leverage their

collective production and marketing power.

3.1.3Scope and Coverage

The provisions of this Policy will apply equally to FPOs already registered either under

the Companies Act or under various central and state cooperative society laws and those

FPOs which will be registered subsequent to the issue of this Policy.

The main qualifying criterion for an FPO to attract benefits under various schemes and

programmes of the Central and State Government is that it must be a body registered and

administered by farmers and the organisation must be focused on activities in the

agriculture and allied

3.1.4 Role of central Institutions in supporting institutions

Department of Agriculture and Cooperation (DAC), Ministry of Agriculture, Govt. of

India will act as the nodal agency for the development and growth of FPOs.

Small Farmers’ Agribusiness Consortium (SFAC), a Society under DAC, will be the

designated agency of DAC to act as a single-window for technical support, training

needs, research and knowledge management and to create linkages to investments,

technology and markets. SFAC will provide all- round support to State Governments,

FPOs and other entities engaged in promotion and development of FPOs. In particular,

SFAC will create sustainable linkages between FPOs and inputs suppliers, technology

providers, extension and research agencies and marketing and processing players, both in

the public and private sectors.

The mandate of National Cooperative Development Corporation (NCDC) will be

expanded to include FPOs in the list of eligible institutions which receive support under

the various programmes of the Corporation.

NAFED will take steps to include FPOs in the list of eligible institutions which act on its

behalf to undertake price support purchase operations.

DAC will work with Food Corporation of India (FCI) and State Governments to

encourage them to include FPOs as procurement agencies under the Minimum Support

Price (MSP) procurement operations for various crops.

DAC and its designated agencies will work with NABARD and other financial

institutions to direct short and medium term credit for working capital and infrastructure

investment needs of FPOs. DAC will also work with all relevant stakeholders to achieve

100% financial inclusion for members of FPOs and link them to Kisan Credit Cards.

DAC will work with Ministry of Corporate Affairs and other stakeholders to further

clarify and strengthen provisions of the law relating to the registration, management and

regulation of FPOs with a view to fostering fast paced growth of FPOs

3.1.5 Role of state government institutions in supporting FPO’s

By declaring FPOs at par with cooperatives registered under the relevant State

legislation and self-help groups/federations for all benefits and facilities that are

extended to member-owned institutions from time to time.

By making provisions for easy issue of licenses to FPOs to trade in inputs (seed,

fertilizer, farm machinery, pesticides etc.) for use of their members as well as routing

the supply of agricultural inputs through FPOs at par with cooperatives.

By using FPOs as producers of certified seed, saplings and other planting material

and extending production and marketing subsidies on par with cooperatives.

By suitable amendments in the APMC Act to allow direct sale of farm produce by

FPOs at the farm gate, through FPO owned procurement and marketing centres and

for facilitating contract farming arrangements between FPOs and bulk buyers

By using FPOs as implementing agencies for various agricultural development

programmes, especially RKVY, NFSM, ATMA etc. and extending the benefits of

central and State funded programmes in agriculture to members of FPOs on a

preferential basis.

By linking FPOs to financial institutions like cooperative banks, State Financial

Corporations etc. for working capital, storage and processing infrastructure and other

investments.

By promulgating state level policies to support and strengthen FPOs to make them

vibrant, sustainable and self-governing bodies

3.1.6 Guiding values and principles for sustaining FPO’s

FPOs are based on the values of self-help, self-responsibility, democracy, equality, equity and

solidarity. FPO members must believe in the ethical values of honesty, openness, social

responsibility and caring for others. The following diagram depicts principles which would act as

pillars for sustaining FPO’s in India.

NIGN

Table-4 Principles for sustaining FPO’s

FPO

PRINCIPLES

ECONOMIC

PARTICIPATION

DEMOCRATIC

CONTROL

AUTONOMY

&

INDEPENDENCE

EDUCATION,

TRAINING,

&

INFORMATION

CO-OPERATION

VOLUNTARY

&

OPEN

MEMBERSHIP

CONCERN FOR

THE

COMMUNITY

3.1.7 FPO Service Model

STRUCTURE OF FPO SERVICES BY FPO

Table 5- Service model of FPO

FARMER’S PRODUCER

COMPANY (FPO)

GENERAL BODY

EXECUTIVE BODY

GENERAL MANAGER

BOARD OF DIRECTORS

LOCAL RESOURCE PERSONS

FPO STAFF

1. PLANNING

2. IMPLEMENTATION

3. MONITORING

1. INPUTS

2. FINANCIAL

3. TECHNICAL

4. INSURANCE

5. PROCUREMENT

6. PACKAGING

7. MARKETING

8. NETWORKING

4.1.1 National bank for Agriculture and rural development (NABARD)

NABARD is an apex development bank in India having headquarters based in Mumbai

(Maharshtra) and other branches are all over the country. It was established on 12 July 1982 by a

special act by the parliament and its main focus was to uplift rural India by increasing the credit

flow for elevation of agriculture & rural non farm sector and completed its 25 years on 12 July

2007.[4] It has been accredited with "matters concerning policy, planning and operations in the

field of credit for agriculture and other economic activities in rural areas in India".

Some of the past initiatives taken by NABARD:

1. SHG-Bank Linkage Programme: The SHG - Bank Linkage Programme is a major plank

of the strategy for delivering financial services to the poor in a sustainable manner. The

search for such alternatives started with internal introspection regarding the innovations

which the poor had been traditionally making, to meet their financial service’s needs. It

was observed that the poor tended to come together in a variety of informal ways for

pooling their savings and dispensing small and unsecured loans at varying costs to group

members on the basis of need. 7.02 The SHG – Bank Linkage Programme was started as

an Action Research Project in 1989 which was the offshoot of a NABARD initiative

during 1987 through sanctioning Rs. 10 lakh to MYRADA as seed money assistance for

experimenting Credit Management Groups. In the same year the Ministry of Rural

Development provided PRADAN with support to establish self-help groups in Rajasthan.

7.03 The experiences of these early efforts led to the approval of a pilot project by

NABARD in 1992. The pilot project was designed as a partnership model between three

agencies, viz., the SHGs, banks and NGOs. This was reviewed by a working group in

1995 that led to the evolution of a streamlined set of RBI approved guidelines to banks to

enable SHGs to open bank accounts, based on a simple “inter se” agreement. This was

coupled with a commitment by NABARD to provide refinance and promotional support

to banks for the SHG - Bank Linkage Programme.

2. Farmer’s Club: National Bank for Agriculture and Rural Development (NABARD)

encourages banks to promote Farmers' Clubs in rural areas under the Farmers’ Club

Programme, earlier known as “Vikas Volunteer Vahini (VVV) Programme”. The

Programme was launched by NABARD in November 1982 to propagate the five

principles of “Development through Credit”

Credit must be used in accordance with the most suitable methods of science and

technology.

The terms and conditions of credit must be fully respected. Work must be done

with skill so as to increase production and productivity.

A part of the additional income created by credit must be saved.

Loan installments must be repaid in time and regularly so as to recycle credit. The

“VVV Programme” was rechristened as “Farmers’ Club Programme” in 2005 by

revisiting its earlier mission

3. Cooperatives (PACS): The cooperative development fund has been established by the

bank in 1992-93 with an amount of Rs.10 crore. It was established under section 45 of

NABARD Act 1981.As per the provision of this fund, the primary agricultural

cooperative society (PACS) could provide its members with agricultural inputs in the

form of cash or farm implements, agriculture implements on hire and storage facility.

Some of the PACS have been reported to provide market linkages to its members.

4. Village development fund (VDF): NABARD has taken an initiative for supporting

producer organizations, adopting a flexible approach to meet the needs of producers. In

order to give a special focus, the “Producers Organization Development Fund”(PODF)

has been set up wef 01 April 2011, with an initial corpus of 50 crore . Any registered

Producers Organization viz, Producers Company( as defined under Sec 581 A in part

IXA of Company’s Act 1956), Producers Cooperatives, registered Farmer Federations,

MACS (Mutually aided cooperative society), industrial cooperative societies, other

registered federations, PACS, etc. set up by producers are eligible under the fund.

Support under PODF is provided as under:

Credit Support is provided for financial intervention. Support in the form of grant,

loans, or a combination of these is also available for capacity building & market

interventions.

Since most of the Producers Organizations are having low capital base, scope for

NABARD's intervention under PODF has been enhanced to support Producers

Organizations for contribution to share capital.

5.1.1 Small farmers’ Agri-business consortium

SFAC in addition to the endeavors complying with its core objectives, also takes up

implementation of the schemes and programs of various Government of India (GOI) Ministries

and Departments and other Financial Institutions and Banks on a service charge basis. The SFAC

society is currently implementing the following schemes and programs:

The Schematic Pattern of Assistance from SFAC, out of GOI grants-in-aid for promotion of

value addition in the hands of farmers, through setting up part-processing, Semi-processing

and full-processing facilities, through the setting up of Agri-Business ventures all over the

country mostly in collaboration with the private sector. and active corporation of commercial

banks.

SFAC also provides to agri-business projects involving value addition in the hands of the

farmers. Most of these projects involve agri-partner and post-harvest management, marketing

etc.

Horticulture Mission For North East And Himalayan States (HMNEH) on Behalf of the

Department of Agriculture & Cooperation, which seeks to create a viable alternative

livelihood option for the people of NER, taking into account the entire gamut of horticulture

development, with all backward and forward linkages in a holistic manner

6.1.1 State policies

Chapter-4 Basic profile of Producer companies

This section provides a brief outline on key parameters of six producer companies. The key parameters include

FPO

PARAMETERS

DEVNADIAGRI

PC

GREEN VISION

PC

BALIRAJA PC

NISARGVIKAS

PC

JAYLAKSHMI PC

SANTANNA MAHARAJ PC

DATE OF INCORPORATION

3-2-2011

10 -1- 2014

12-09-2012

November,2011

26-7-2014

14-3-2014

NUMBER OF VILLAGES

25

10

103

50

4

11

GOVERNING ACT

Companies act, 1956

Companies act,

1956

Companies act, 1956

Companies act, 1956

Companies act,

1956

Companies act, 1956

AUTHORISED CAPITAL

15,00,000

4,50,000

50,00,000

40,00,000

15,00,000

10,00,000

PAID UP CAPITAL

9,00,000

2,25,000

20,00,000

30,00,000

7,13,000

10,00,000

FACILITATOR

Yuvamitra

Yuvamitra

Dilasa

Nisarg vikas bahuudeshiyya sansthan

SFAC

SFAC

FPO

PARAMETERS

DEVNADIAGRI

PC

GREEN VISION

PC

BALIRAJA PC

NISARGVIKAS

PC

JAYLAKSHMI PC

SANTANNA MAHARAJ PC

CHIEF EXECUTIVE OFFICER (CEO)

-

Mr.ArunThorat

Mrs.Vaishali khadilkar

P. Waghmare

-

-

EDUCATIONAL QUALIFICATION

-

MA (Eco)

M.E( Civil)

B.E (Civil)

-

-

NUMBER OF SHAREHOLDERS

900

880

480

1130

1000

600

NUMBER OF DIRECTORS

13

11

5

10

9

11

NUMBER OF EMPLOYEES

6

3

7

12

1

1

MAIN BUSINESS

1.Providing agricultural inputs to primary producers 2.Procurement,Marketing & selling of vegetables

1. Providing agricultural inputs to primary producers 2.Marketing & selling of Onions

1.Procurement,Processing & marketing of Soybean and pulses

1.Selling of pulses & soybean

1.Selling of soybean

PRODUCER COMPANIES ASSESMENT MATRIX

CRITERIA

INDICATORS

RATING Devnadi PC Green

Vision PC Bali raja PC Jay Lakshmi

PC Sant Anna maharaja PC

Nisarg PC

Structure

Size Social Cohesion among members

SF/MF and women members are included

Not dominated by Politically / Economically powerful members

Good

Good

Satisfactory

Satisfactory

Member

Awareness

Vision and mission of PO known by the members

Awareness among Poor and women

members about the purpose of forming PO

Activities of PO known by the

members

Very Good

Very Good

Good

Satisfactory

Satisfactory

Very good

Management

Qualification &Tenure of CEO Employee roles and responsibilities

adequately allocated Adequate representation of Board of

directors BOD selected/Elected by members

Organizational Functioning

Timely meeting of BOD & AGM Key issues discussed in AGM by the

members Maximum attendance and

participation of members in decision

making in AGM Collective approach to overcome

organizational issues Decisions taken in independence of

promoting agency

Maintenance of statutory registers, books, records etc.

Complete adherence to Statutory compliances

Very good

Good

Very good

Resource

Mobilization

Raising of funds to carry out

business activities Reserves maintained with the PO

(%)

PO obtains government scheme to meet its needs

Services and benefits obtained from external institutions

Capacity building

Training workshops arranged for CEO, BOD, Employees & Members by the PO

Utilization of training programmes

by stakeholders in solving complex organizational issues

Access to Technology

Use of modern technologies in various operational processes

Usage of Management information systems (MIS) software to

streamline business operations Computer literacy among the office

bearers

Distribution of

benefits

Equitable distribution of Benefits

Mechanisms of benefit sharing

developed and adhered to

1.2 Membership Profile

Parameter Devnadi PC

Green vision PC

Baliraja PC

Nisarg PC

JayLakshmi PC

Sant Anna Maharaj PC

Total Members 1000 880 480

1130 1000 600

Active members

600

Non-Active members 530

Average Land holding

3-4 acres 2-3 acres

Below 5 acres

2.5-4 acres

2-4 acres 2.5-3 acres

Small & Marginal Farmers (%)

60% 50%

75% 60% 60% 40%

Women members (%)

10 % 25% 5% 20% 26% 25%

CHAPTER -5 FINDINGS AND DISCUSSIONS

Perspective

Traditional Cooperatives have been unsuccessful to link small farmers to the global market. The

traditional cooperatives form of organization has suffered from various constraints, which had

negative effect on the day to day operations and performance of cooperatives. The constraints

which emerge from the very nature of principles of cooperative form of organization include the

commitment to buy entire produce from the all members, Lack of financial and managerial

resource, lack of market orientation and small size of operations. In the light of previous

experience face by cooperatives, there was intense discussion exercise under the leadership of

Prof.Y.K.Alagh with civil society, rural development practioners & policymakers to come out

with a separate act dealing with small marginal farmers or producers. This led to the amendment

to the Companies Act, 1956 in 2003, which provided for producer companies through a separate

chapter based on the Alagh Committee report. This amendment gave primary producers the

flexibility to organize themselves on the basis of a one man-one vote principle, which is the

essence of a cooperative institution. A producer company operates under the regulatory

framework that applies to companies, which is distinctly different from that of the

cooperatives, which was seen as arbitrary and corrupt.

Major Observations and findings

These major observations are found on the basis of PC assessment matrix which was tested

during the field study. Based on the rating given to parameters some significant patterns emerged

out from the assessment matrix which helped to analyze the PC from various dimensions.

PARAMETERS MAJOR OBSERVATIONS

Role of Promoter

Institution

1. The role of promoter institution is critical part of formation of

producer companies. During field visit, some significant patterns

emerged where PC like Devnadi Valley, Baliraja ,Green vision,

NisargVikas already had strong promoter support, whereas jay Lakshmi

& Sant PC were self-promoted .

2. Devnadivalley & Green Vision were initiated by Yuva Mitra(Nashik).

Baliraja by Dilasa(Aurangabad) & NisargVikas by Nisarg Bauudeshiya

sansthan.

3. These promoter institutions have been relentlessly working with the

community for more than a decade. Due to their strong presence in their

respective areas, they have successfully implemented various projects,

programmes & schemes at the community level. This has gained

confidence among the people which has developed public trust in the

producer companies.

4. Despite of PC being at the nascent stage, the sense of ownership and

pride in combination with promoter trust plays a pivotal role for

sustainable future of Producer companies.

5. While mobilizing farmers for PC like Jay Lakshmi & Sant Annasaheb

PC has been a herculean task till now. Lack of farmer’s confidence is

certainly ailing this self-promoted PC.

6. Though promoter institutions were desired to take lead role in guiding

managerial direction and eventually transfer the affairs to Producer

companies but all the four PCs were highly dependent on Promoter

agency for their operations which gives rise to the question of

Independence.

Membership &

Awareness

1. The average number of shareholders across the PC studied is around

450 approximately.

2. Dismal Participation of women members is concern for producer

companies. Women are generally not allowed to be a part of decision

making process in households. Deep societal prejudice still exists in the

Marathwada region of Maharshtra state. Those women members allowed

are because of land entitlements are registered on their name.

3. Awareness about purpose, vision, Mission, business objectives

remain high because of efforts taken by PC to disseminate knowledge by

organizing community meetings in villages.

4.The participation in Annual General Meeting remains satisfactory(50-

60%) across PC due to primary producers living in villages which are

widely dispersed and while interacting with them it was found that they

could not bear the transport expense.

5. The document verification required for board of directors is pan card.

Small and marginal famers are unable to possess pan cards and the

process of representing Board of directors requires Pan-Card as a

statutory compliance. This acts as a disadvantage as they are ineligible

for it.

Leadership 1. The CEO of the Producer companies studied (GreenVision, Baliraja &

NisargVikas) are the employees of their promoter agency. During Field

visit to DevnadiValley in Nashik, recruitment of CEO was under process.

While Jaylaksmi & SantAnna didn’t have fullTime CEO.

2. The CEO of FPO initiated by Promoter agency had a broad

understanding of business activities but they lacked marketing and

managerial skills.

3.The ones (Jaylakshmi & Sant Anna maharaj PC) had no professional

expertise to manage their business. High remuneration demanded by the

Professionals was the reason cited by the board members. Additional

responsibilities are now been shared by the board of directors now.

4. Devnadi Valley since its inception has higher attrition rate of

professionals. Weak balance sheet is one of the reasons they could not

satisfy the remuneration demand of professionals.

5. To compete in the market, the producer companies have to be

professionally managed like any other commercial enterprise and

for this engagement of professional managers is required .

6. Directionless leadership would certainly curtail smooth functioning of

PC and this issue poses a major challenge across PCs studied.