A Study on Profile and SWOT Analysis of Farmer Producer Organizations in Andhra Pradesh, India

INTRODUCTION

                                 In India, the Producer Company idea has arisen as a new- generation farmer’s organization. It is a voluntary association of rural producers that get together to pursue certain common interests by establishing financial and technical skills in pursuit of economic activities that benefit its members. Under the presidency of economist Y. K. Alagh, the concept was implemented in 2002 by adding a new part IX A to the Companies Act 1956. [6]. Several state governments facilitated the ability of FPOs to sell agricultural goods by reducing transportation and marketing restrictions. The report of the Committee on Doubling Farmers’ Income (DFI) advocated the development of 7,000 FPOs by 2022 in order to coordinate efforts to double farmers’ income (Report of the Committee on Doubling Farmers’ Income September 2018). Yet, there was a substantial gap between the Farmer Producer Organizations’ potential and their growth [12]. It might be due to a lack of effective business planning, increased administrative regulations, a lack of expertise of the promoting institutions, a lack of suitable infrastructure, and so on [7,8,9].

                                 Any recognized legal body of primary producers engaging in farm/ farm economic operations is referred to as a Farmer Producer Organization. They labor for the interest of shareholder members and divide earnings among them. FPOs were established as a legal body in 2002 under Section IXA of the Indian Companies Act 1956, with the goal of empowering and improving the bargaining power, net income, and quality of life of small and marginal farmers/ producers [13]. Small Farmers’ Agribusiness Consortium (SFAC) is recognized as the country’s nodal body for FPO promotion. Through several initiatives such as Paramparagat Krishi Vikas Yojana (PKVY), Rashtriya Krishi Vikas Yojana (RKVY), and Vegetable Initiative for Urban Cluster (VIUC), many state departments and central agencies are active in mobilizing primary producers into producer organizations. Among the central- level entities, SFAC and NABARD are the key players in promoting FPOs in the country [4].

                                 The establishment and operation of FPOs vary greatly among states and areas of the country. Given the state’s farmers’ plight as a result of declining farm profitability and rising risks in agriculture and allied sectors, the Government of Andhra Pradesh (GoAP) saw a pressing need to establish an appropriate ecosystem in the state to strengthen agriculture, fisheries, horticulture, dairy, and meat livestock sectors. Finally, following several rounds of discussions with various stakeholders, the government, with the assistance of ICRISAT, developed a strategy document to facilitate the formation of producer organizations in the state, releasing ‘Rythu Kosam: Andhra Pradesh Farmers Producers Organizations’ Promotion Policy- 2016, Operational Guidelines’ (GoAP 2016). It is critical to identify the FPOs’ strengths and limitations, as well as the possibilities and threats they face, in order to propose appropriate policies to improve the operation of FPOs in Andhra Pradesh in particular and the country in general [3].

METHODOLOGY

                             The paper has evaluated the functioning and performance of selected farmer’s producer organizations of Andhra Pradesh. Data was collected in Andhra Pradesh state, India in the year 2023. The study is based on both primary data collected through three FPOs in Andhra Pradesh and secondary data. Data was collected through face-to-face personal interview method by the researcher to the Board of Directors/ CEO of selected Farmer Producer Organizations (FPOs) in Andhra Pradesh. There is a lot of variation in the formation and functioning of the FPOs across the states and regions of the country. It is important to understand the strengths and weaknesses of the FPOs as also the opportunities and threats faced by them so as to suggest suitable policies to improve the functioning of the FPOs in Andhra Pradesh state.  For the present study, a total of three Farmer Producer Organizations (FPOs) which are performing their role in the Agricultural, Horticultural, and Fisheries sectors were purposely selected to know the difference in basic profile, services/benefits that they provide to FPO members. The paper further helps to understand the SWOT analysis and constraints of each FPO. The study also provides the information on the organizational structure of FPO, typical services provided by FPO, and the key difference between cooperative and Producer Company Parameters. The SWOT analysis revealed that the FPOs of the region are fortunate to have been supported by promoting institutions.

Objectives of Farmer Producer Organization

The prime objective of mobilizing farmers into member-owned producer organizations, or FPCs, is to increase agriculturists’ production, productivity, and profitability, particularly among small farmers in the country. The members may engage in the following activities:

1. The production, harvesting, processing, procurement, grading, pooling, handling, marketing, selling, and export of the members’ main products, as well as the importation of commodities or services for their benefit.

2. Manufacture, sell, or distribute machinery, equipment, or consumables primarily to its members

3. Encouraging mutual aid, welfare measures, financial services, and producer or primary produce insurance.

RESULTS AND DISCUSSION

                     Figure 1 depicts the organization of a Farmer Producer Company and indicates that the minimum number of directors is 5 and the maximum number of directors is 15. The minimum number of members necessary is 10. The company’s minimum paid-up capital should be Rs. 10,000/-. The registered office should be in India. Election- within 90 days of enrollment for a period ranging from one to five years, Producer Company Limited should be appended to the end of the FPO’s name, and at least one meeting should be held each year [10].

	Farmers’ Producer Organizations (FPOs)

(Source: Dept. of Agriculture and Cooperation, Govt. of India, 2013)

                Fig 1: Organizational structure of Farmer Producer Organization

Table1: Key differences between cooperative and Producer Company Parameters

Parameters	Cooperative	Producer company
Registration	Cooperative Societies Act.	Indian Companies Act
Objectives	Single object	Multi-object
Area of Operation	Restricted, discretionary	Entire Union of India
Membership	Individuals and cooperatives	Any individual, group, association, producer of the goods or services
Share	Non-tradable	Non-tradable But transferable limited to members on par value
Profit sharing	Limited dividends on shares	Commensurate with volume of business
Voting rights	One member, one vote, but Government and Registrar of Cooperatives hold veto power	One member, one vote. Members not having transactions with the company cannot vote
Government control	Highly patronized to the extent of interference	Minimal, limited to statutory requirements
Extent of Autonomy	Limited in “real world scenario	Fully autonomous, self-ruled within the provisions of Act
Reserves	Created if there are profits	Mandatory to create every year
Borrowing power	Restricted	More freedom and alternatives
Relationship with other corporate/ business houses/NGOs	Transaction based	Producers and corporate entity can together float a producer company

(Source: www.sfacindia.in)

Table 2: 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
Chattisgarh	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

Ministry of Agriculture & Farmers Welfare, Farmer Producer Organizations (FPOs)

                                 Results from table 2 show that, detail of Producer Companies for the year 2020, State wise. A total of 4959 FPOs were active in India according to the report given by the Ministry of Agriculture & Farmers Welfare, Farmer Producer Organizations (FPOs).

Table 3: Basic profile of selected Farmer Producer Organization of Andhra Pradesh

Sl.No	Details of FPO	FPO1 – PrFPCL	FPO2 – JFPCL	FPO3 –PFPCL
1	Name of the FPO	Parimala Flower Producer Company Limited	Jalasampada Fishermen Producer Company Limited	Ponnur Farmers Producer Company Limited
2	Address of FPO	D.No – 3-36/B, Bathapudi Village, Bapatla district, AP	D.No – 4-6, Peddapalem, Madanur -523280, Kothapatnam Mandalam, Prakasam District, Andhra Pradesh	D No. 21-831/1, Gajula Palem,  Ponnur town, Guntur District, AP 522124
3	Corporate Identification Number (CIN)	U01100AP2016PTC103363	U01220AP2017PTC106713	U01820AP2019PTC112899
4	Year of establishment	30 May 2016	2017	13 September 2019
5	Year of registration	2016	2017	2019
6	Registration Number	103363	106713	112899
7	Company Status	Active	Active	Active
8	Company Category	Company limited by Shares	Company limited by Shares	Company limited by Shares
9	Company Sub Category	Non-Government company	Non- Government company	Non- Government company
10	Objectives of the FPO	Direct benefit to the farmers	To increase fishermen income	To improve farmers income
11	Total No. of members in FPO	950	602	4000
12	Total No. of women in FPO	>300	30-40	430
13	Date of Last Annual General Meeting (AGM)	29 September, 2022.	30 November 2021	30 November 2021
14	Date of Latest Balance Sheet	31 March, 2021	31 March 2021	31 March 2021
15	No. of directors	5	5	5
16	No. of Women directors among total directors	1	–	2
17	Names of directors	Mahalakshmi.B, Chandramouli Reddy.M Naga Mohan. B, Srinivas Reddy. D, and  Singa Reddy. B	Venkateshwarlu Ponnapudi Rambabu Ponnapudi Hari Babu Ponnapudi Lashmi Ponnapudi Srikanth Koduri	Bhupathirao Yepuri, Swarnalatha Katikala, Vijayakumar Dakkumalla, Vara Prasada Rao Kagitha and Prasantha Kumari Katikala.
18	No. of staff	11	09	08
19	Authorized Capital (Rs. Lakh)	INR 20.00 lac	Rs. 10,00,000	₹2,100,000
20	Paid Up Capital (Rs. Lakh)	INR 7.21 lac.	Rs. 1,906,500.	₹2,010,000
21	Membership Fee (Rs)	100 Rs/-	500 Rs/-	500 Rs/-
22	Villages Covered Under FPO	10	7	65
23	Crops Covered/ FPO main activities	Horticulture – Paddy, vegetables, Flowers (Jasmin, marrygold)	Fisheries	Agriculture – Paddy, maize, Black gram
24	Coverage of the jurisdiction	State level	District level	District level
25	Main Business	Marketing, Exporting	Marketing and exporting of fish	Agriculture, Hunting And Related Service Activities
26	Trainings received	>30	>10	2-3
27	Technical support	Both (Govt, Private)	Private	Private
28	Business License	Yes	Yes	Yes
29	Turnover (Rs. Lakh)	Approx. 1Cr	Approx. 10 lakh	Approx. 15 Cr
30	Any norms of the organizations	Attendance	Attendance	Attendance
31	Type of assets	Rent Building, Export Vehicle, Plant nursery, seedling unit	Rent Building, machinery for boats	Rent Building, black gram segregating machine
32	Mode of profit distribution	Direct to members	Both online and offline	Direct to members
33	Communication networks adopted	Open communication	Direct phone call to members	Open communication
34	Loan was taken from the Bank	NABKISAN FINANCE LIMITED	–	–
35	Awards received	Best performing award by NABARD -2021-22	–	–

FPO 1 – Parimala Flower Producer Company Limited – PrFPCL

Parimala Flower Producer Company Limited is a private company incorporated on 30 May-, 2016. It is classified as a private limited company and is located in Bathapudi Village, Bapatla district of Andhra Pradesh. It‘s authorized share capital is INR 20.00 lac and the total paid-up capital is INR 7.21 lac and its turnover is Approximately 1 Cr. The current status of Parimala Flower Producer Company Limited is – Active. The Corporate Identification Number (CIN) of Parimala Flower Producer Company Limited is U01100AP2016PTC103363. The registered office of Parimala Flower Producer Company Limited is at D.No.3-36/B Bethapudi Village, Bapatla Mandal, Guntur, Andhra Pradesh.

It was established on30 May 2016, and registered under the companies act of the same year 2016 with registration number 103363. The company category is limited by shares and it is a non-government company. The main objective of the PrFPCL is a direct benefit to the farmers. A total of 950 registered members are in PrFPCL and 300 women members are among them.  The last reported AGM (Annual General Meeting) of Parimala Flower Producer Company Limited, per records, was held on 29 September, 2022. Also, its last balance sheet was prepared for the period ending on 31 March, 2022.  Parimala Flower Producer Company Limited has five directors – Mahalakshmi Bogireddy, Chandramouli Reddy Macha, and Naga Mohan. B, Srinivas Reddy. D and Singa Reddy. B. A total of 11 members are working as staff in FPO.  The membership fee for joining into FPO is 100Rs/- per one person. Around 10 villages are covered under FPO. The main business of FPO is on marketing and exportations horticultural crops, especially Jasmin, and Marrygold flowers throughout the state level and FPO has a business license. More than 30 trainings were received by members through various government organizations like NABARD, KVK, Agricultural and Horticultural Departments, etc. FPO is getting technical support from both the private and government sectors. The main norm of the FPO is compulsory attendance for members who are attending General Body meetings and training programs. The direct mode of distribution is followed in FPO. An open type of communication network is adopted in the organization to have better contact with members. The rented building, Export vehicle, plant nursery, and seedling unit were the assets of Parimala Flower Producer Company Limited. A loan taken from NABKISAN FINANCE LIMITED. Parimala Flower Producer Company Limited has received a best performing award by NABARD for the year of 2021-2022.

FPO 2 – Jalasampada Fishermen Producer Company Limited – JFPCL

Jalasampada Fishermen Producer Company Limited is a private company incorporated on 2017. It is classified as a private limited company and is located in Peddapalem, Kothapatnam Mandalam, Prakasam District of Andhra Pradesh. It’s authorized share capital is INR 10,00,000Rs/-  and the total paid-up capital is INR 1,906,500 Rs/- and its turnover is Approximately 10 lakh. The current status of Jalasampada Fishermen Producer Company Limited is – Active. The Corporate Identification Number (CIN) of Jalasampada Fishermen Producer Company Limited is U01220AP2017PTC106713. The registered office of Parimala Flower Producer Company Limited is at D.No – 4-6, Peddapalem, Madanur -523280, Kothapatnam Mandalam, Prakasam District, Andhra Pradesh.

                                 It was established in 2017, and registered under the companies act in the same year with registration number 106713. The company category is limited by shares and it is a non-government company. The main objective of the JFPCL is to increase fishermen’s income. A total 602 registered members are in JFPCL and 30 -40 women members are among them.  The last reported AGM (Annual General Meeting) of Jalasampada Fishermen Producer Company Limited, per records, was held on 30 November, 2021. Also, its last balance sheet was prepared for the period ending on 31 March, 2022.  Jalasampada Fishermen Producer Company Limited has five directors – Venkateshwarlu Ponnapudi, Rambabu Ponnapudi, Hari Babu Ponnapudi, Lashmi Ponnapudi and Srikanth Koduri. A total of 09 members are working as staff in FPO.  The membership fee for joining FPO is 500Rs/- per person. Around 7 villages are covered under FPO. Main business of FPO is on marketing and exportations of fresh and dry fish, and prawns throughout the state level and FPO has a business license. More than 10 training were received by members through various government organizations like NABARD, KVK Fishery Department etc. FPO is getting technical support from both the private and government sector. The main norm of the FPO is compulsory attendance to members who are attending General Body meetings and training programs. The direct mode of distribution is followed in FPO. An  open type of communication network is adopted in the organization to have better contact with members. Rented buildings, Export vehicles, and boat machinery were the assets of Jalasampada Fishermen Producer Company Limited.

FPO 3 – Ponnur Farmers Producer Company Limited – PFPCL

Ponnur Farmers Producer Company Limited is a private company incorporated in 2019. It is classified as a private limited company and is located in Gajula Palem,  Ponnur town, Guntur District of Andhra Pradesh. It’s authorized share capital is INR 2,100,000 and the total paid-up capital is INR 2,010,000 and its turnover is Approximately 15 Cr. The current status of Ponnur Farmers Producer Company Limited is – Active. The Corporate Identification Number (CIN) of Ponnur Farmers Producer Company Limited is U01220AP2017PTC106713. The registered office of Ponnur Farmers Producer Company Limited is at D.No – 4-6, Peddapalem, Madanur -523280, Kothapatnam Mandalam, Prakasam District, Andhra Pradesh

It was established in 2019, and registered under the companies act at the same year 2019 with registration number 112899. The company category is limited by shares and it is a non-government company. The main objective of the PFPCL is to improve farmers’ income. A total 4000 registered members are in PFPCL and 430 women members are among them.  The last reported AGM (Annual General Meeting) of Ponnur Farmers Producer Company Limited, per records, was held on 30 November, 2021. Also, its last balance sheet was prepared for the period ending on 31 March, 2022.  Ponnur Farmers Producer Company Limited has five directors – Bhupathirao Yepuri, Swarnalatha Katikala, Vijayakumar Dakkumalla, Vara Prasada Rao Kagitha and Prasantha Kumari Katikala A total of 08 members are working as staff in FPO.  The membership fee for joining FPO is 500Rs/- per person. Around 65 villages are covered under FPO. The main business of FPO is on hunting and related service activities and FPO has a business license. Around 3-4 training were received by members through various government organizations like NABARD, KVK, Agricultural and Horticultural Departments, etc. FPO is getting technical support from both private and government sectors. The main norm of the FPO is compulsory attendance to members who are attending General Body meetings and training programs. The direct mode of distribution is followed in FPO. An open type of communication network is adopted in the organization to have better contact with members. The rented building, library, Export vehicle fertilizer shop, and black gram segregating machine are the assets of Ponnur Farmers Producer Company Limited.

Table 4: Typical services of Farmer Producer Organization (FPO)

Sl.No	Services
1	Financial Services	The FPO will provide loans for crops, purchase of tractors, pump sets, construction of wells, laying of pipelines.
2	Input Supply Services	The FPO will provide low cost and quality inputs to member farmers. It will supply fertilizers, pesticides, seeds, sprayers, pump sets, accessories, pipelines.
3	Procurement and Packaging Services	The FPO will procure agriculture produce from its member farmers; will do the storage, value addition and packaging.
4	Marketing Services	The FPO will do the direct marketing after procurement of agricultural produce. This will enable members to save in terms of time, transaction costs, weighment losses, distress sales, price fluctuations, transportation, quality maintenance etc.
5	Insurance Services	The FPO will provide various insurance like crop insurance, electric motors insurance and life insurance.
6	Technical Services	FPO will promote best practices of farming, maintain marketing information system, diversifying and raising levels of knowledge and skills in agricultural production and post-harvest processing that adds value to products.
7	Networking Services	Making channels of information (e.g. about product specifications, market prices) and other business services accessible to rural producers; facilitating linkages with financial institutions, building linkages of producers, processors, traders and consumers, facilitating linkages with government programmes.

Table 5: Services and benefits provided by selected Farmer Producer Organization to the members in Andhra Pradesh

Sl. No	Particulars	FPO – 1	FPO -2	FPO – 3
1	Marketing of Seeds/ pesticides/fertilizers	✔	✔	✔
2	Leasing of machinery	✔	✔	✔
3	Distribution of DAP fertilizers	–	–	–
4	Arrangements for manures	✔	–	✔
5	Distribution of bio-inputs	–	✔	–
6	Marketing of composting kit	✔	–	✔
7	Bulk procurement of final produce	✔	✔	✔
8	Grading of final produce	✔	✔	✔
9	Conducting extension meetings	✔	✔	✔
10	Organic/export certification	–	✔	–
11	Field inspections/supervision	✔	✔	✔
12	Exposure visits to model farms	✔	✔	✔

From the above table (5) it is concluded that, various services are offered by the sample FPOs. The perusal of the table reveals that leasing of machinery and marketing of seeds, fertilizers, and other inputs, bulk procurement of final produce, grading of final produce, conducting extension meetings, field inspections/supervision, and exposure visits to model farms is done by three (FPO -1 Parimala Flower Producer Company Limited – PrFPCL, FPO 2 – Jalasampada Fishermen Producer Company Limited – JFPCL and FPO 3 – Ponnur Farmers Producer Company Limited – PFPCL) of the FPOs. Whereas the distribution of DAP fertilizers was not done by any of the FPOs. Arrangement of manures and marketing of composting kit services are provided by FPO -1 Parimala Flower Producer Company Limited – PrFPCL and FPO – 2Jalasampada Fishermen Producer Company Limited. With regard to the distribution of bio-inputs and organic/export certification are provided by FPO – 2Jalasampada Fishermen Producer Company Limited. 

Table 6: SWOT Analysis of Selected Farmer Producer Organization in Andhra Pradesh.

Strengths	Weakness
FPO 1- Parimala Flower Producer Company Limited Fresh vegetables direct marketing, The business model, A high proportion of female shareholders and directors demonstrates women’s empowerment. Structure of work, Advice from a government organization such as NABARD. Krishi Vigyan Kendra provided technological assistance. Developing horticultural-style sustainable secondary agricultural practises.	FPO 1- Parimala Flower Producer Company Limited Financial assistance, Insufficient experience in various commercial operations, such as coconut, chilli, and paddy commerce. Inadequate professional understanding about product value addition.
FPO 2 – Jalasampada Fishermen Producer Company Limited.  Coordination with agencies, Promoting sustainable fishery practices	FPO 2 – Jalasampada Fishermen Producer Company Limited.  Finance – paid-up capital and credit availability remain inadequate in proportion to demand; poor infrastructure; a lack of professional knowledge; a low level of participation; and a dismal quality of life for members of fishing families.
FPO 3 – Ponnur Farmers Producer Company Limited – PFPCL Large number of women shareholders which indicates women empowerment. Social mobilization and institutional structure. Progressive operation and governance system in place.  Good infrastructure – storehouse, harvester, electronic balance, currency counting device.	FPO 3 – Ponnur Farmers Producer Company Limited – PFPCL Delay in the recovery of sale proceeds. The assets base isn’t sufficient as the demand is increasing. The incentive/incitement structure isn’t encouraging their activities are occasionally not satisfactory. Subsidy or Subvention driven measures increase the anticipation and expectation position of growers which frequently inhibit them to work with a business mind set.
Opportunities	Threats
FPO 1- Parimala Flower Producer Company Limited Training for FPOs, Better linking,  Limited government control, Institutional support Having a demonstration farm enables producers to get hands-on instruction.	FPO 1- Parimala Flower Producer Company Limited Private-sector competition, long-term viability, administrative controls
FPO 2 – Jalasampada Fishermen Producer Company Limited.  Partnerships with traders and other Producer Associations at the district and state levels can help the firm even more.	FPO 2 – Jalasampada Fishermen Producer Company Limited.  Natural disasters and climate change Price fluctuation of the produce
FPO 3 – Ponnur Farmers Producer Company Limited – PFPCL Working on financial services such as crop insurance Developing a brand value for FPO on produce services, conducting market/demand research on specific products, assisting growers in production, and assuring early market access.	FPO 3 – Ponnur Farmers Producer Company Limited – PFPCL Private input providers and merchants frequently propagate misinformation to member farms. Each failure on the part of the corporation becomes a game point for them. When disagreements and conflicts are not resolved at the appropriate time

Table 7: Constraints faced by selected Farmer Producer Organization

Sl.No	Services by FPO	PrFPCL	JFPCL	PFPCL
1	Undeveloped storage facilities	–	✔	✔
2	Poor Professional Management	✔	✔	✔
3	Lack of sufficient finance	–	✔	–
4	Mobilization of farmers	✔	✔	✔
5	Lack of proper government price policy	✔	✔	✔
6	Lack of proper infrastructure (implements, irrigation facilities, power and electricity)	–	✔	–
7	Undeveloped storage facilities	–	✔	–
8	Lack of awareness of credit facilities	✔	✔	✔
9	Lack of Computer knowledge which makes them unable to derive benefits of the available ICT tools	✔	✔	✔
10	Lack of skilled laborers in harvesting & processing	✔	✔	✔

From the above table, it is concluded that, all selected three FPOs were facing these constraints as: Poor Professional Management, Mobilization of farmers, Lack of proper government price policy, Lack of awareness of credit facilities, and Lack of Computer knowledge which makes them unable to derive benefits of the available ICT tools and Lack of skilled laborers in harvesting & processing. Whereas, undeveloped storage facilities as a constraint were expressed by JFPCL and PFPCL. However, Lack of sufficient finance, Lack of proper infrastructure (implements, irrigation facilities, power, and electricity), and Undeveloped storage facilities a constraint which was expressed by JFPCL.

CONCLUSION

                                 It is important to understand the strengths and weaknesses of the FPOs as also the opportunities and threats faced by them so as to suggest suitable policies to improve the functioning of the FPOs in Andhra Pradesh state. SWOT Analysis is used to examine an organization’s existing situation before deciding on a new strategy. Fundamentally, the information gathered on the strengths and possibilities assisted the FPOs in developing a clear grasp of the internal positive factors that needed to be enhanced further. Similarly, information gathered on weaknesses and threats has offered important insights for being alerted in time to wake up and prepare for external negative influences. The analysis of limitations can give guidance for policy frameworks aimed at ensuring the efficient operation of these Farmer Producer Organizations.

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