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.