Synopsis: Nabard is collaborating with farmer producer organizations (FPOs) to streamline the agricultural value chain and reduce the number of intermediaries, which currently result in low farm gate prices. By promoting value addition, marketing, and direct selling, Nabard aims to foster entrepreneurship among farmers.
Nabard is collaborating with farmer producer organizations (FPOs) to streamline the agricultural value chain.
Currently, 8-10 intermediaries, including retailers and distributors, are involved in each commodity, causing farm gate prices to be significantly lower than consumer prices.
R Anand, chief general manager and officer-in-charge of Nabard's Chennai regional office, highlighted in an interview with TOI that Nabard aims to promote entrepreneurship among farmers through value addition, marketing, and direct selling of their produce.
He also expects a notable increase in rural MSME credit offtake this fiscal year.
Excerpts:
How is Nabard helping farmers achieve better prices??
Nabard collaborates with FPOs to reduce the number of intermediaries in the value chain.
Currently, each commodity involves 8-10 intermediaries, resulting in farm gate prices being significantly lower than consumer prices.
By adding value through sorting, processing, and grading, we can significantly enhance prices.
We are aggregating at the farm gate and supporting marketing and direct selling through online platforms.
We have onboarded 100 FPOs to the Open Network Digital Commerce (ONDC), providing grants for cataloguing and technical support.
Despite promises, aren't most FPOs in the state inefficient??
Some FPOs are performing well, with increased exports and significant balance-sheet growth.
In fact, 56% of promoted FPOs are in the Grade A category, indicating superior performance in terms of output, sales, and governance.
However, overall performance still needs improvement.
The challenge lies in producers balancing their roles as both producers and entrepreneurs.
They work hard for months, and we are trying to nurture their entrepreneurial spirit through grants and mentorship.
It will take time.
What are your efforts to revive dysfunctional FPOs??
The Chennai regional office is pioneering efforts to create a system for merging and acquiring FPOs.
We are exploring the possibility of merging low-performing FPOs to create more compact and efficient organizations.
Why do FPOs struggle with branding and marketing their produce??
The issue is that each organization has its own brand, leading to multiple brands for the same product.
In the Nabard Chennai region, we are promoting federated branding with standardized products.
Through the Madurai Agribusiness Incubation Forum (MABIF), 10-15 FPOs have collaborated to create a federated brand and have received support for product and brand development.
What is Nabard's projection for direct financing to state government agencies??
Nabard has supported the state government in various infrastructure projects, including constructing colleges, schools, primary health centers, veterinary hospitals, and roads.
Last year, our direct financing to the state government and state-owned corporations amounted to around Rs. 12,000 crore.
This year, we aim to significantly increase this to Rs. 25,000 crore for infrastructure projects in animal husbandry and fisheries.
We are in discussions with the government to identify suitable projects.
What is the projected credit demand for MSMEs in Tamil Nadu for FY25??
We anticipate a substantial increase in MSME financing this year.
Last year, the aftermath of Covid-19 hindered growth, but this year we expect a significant jump in rural MSME lending.
In conclusion, Nabard's efforts to collaborate with farmer producer organizations (FPOs) and streamline the agricultural value chain are set to significantly improve farm gate prices and foster entrepreneurship among farmers.
By reducing the number of intermediaries and promoting value addition, Nabard aims to bridge the gap between farm gate and consumer prices.
Despite challenges, ongoing initiatives like federated branding and the potential merger of low-performing FPOs show promise for enhancing efficiency and market presence.
Additionally, Nabard's increased focus on rural MSME credit and direct financing for state government infrastructure projects indicates a strong commitment to boosting rural economic growth.
Overall, these initiatives are poised to create a more sustainable and profitable agricultural ecosystem for farmers.
