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A CASE STUDY ON FARMER

PRODUCER ORGANISATION (FPO)


FOR
GREEN LOGISTICS PROJECT

MD KHURSHED ALAM
PGDM (AFB)
ID NO AFB2017-19014
(AGRICULTURE & FOOD MANAGEMENT INSTITUTE)

PROJECT MANAGER: Smt. NAMERTA SHARMA


Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH or GIZ

2018
GREEN LOGISTICS PROJECT
DECLARATION

I, MD KHURSHED ALAM, hereby declare that the CASE STUDY


ON FARMER PRODUCER ORGANISATION (FPO) FOR
GREEN LOGISTICS PROJECT
submitted to the GIZ & AFMI for the requirement of PGDM course
curriculum is the result of original research work done by me.
I also declare that no material contained in the study has been
published earlier in any manner.

Place MD KHURSHED ALAM


Date AFB2017-19014

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AGRICULTURE AND FOOD MANAGEMENT INSTITUTE
(Approved by AICTE New Delhi)
Behind Belawadi,KR Mills,S.R. patna.
Mandya-571438
Mob:9480849421
E-mail – examinationationafmi@gmail.com

CERTIFICATE:

This is to certify that Mr. MD KHURSHED ALAM (AFB2017-19014), the student of


AGRICULTURE AND FOOD MANAGEMENT INSTITUTE (Approved by AICTE New
Delhi) had successfully completed “A Case Study On Farmer producer Organisation
(FPO) for Green Logistics project” at “Deutsche Gesellschaft für Internationale
Zusammenarbeit (GIZ) GmbH” for the partial fulfilment of the requirement of the award as a
part of curriculum for Agriculture and food management.
His performance during training was satisfactory and he had undergone fair exposure of
product formulation, quality control, marketing as well as Research and Development.
We wish him all the best for his future.

Prof. Md Ameen Shareff


(Training Co-coordinator)
(Director)
AGRICULTURE AND FOOD
MANAGEMENT INSTITUTE
MYSORE 570004

GREEN LOGISTICS PROJECT


ACKNOWLEDGEMENTS

It is by the immense blessings of GOD for their grace and blessings showered on
me, always accompanied me in all endeavors and successfully achieving my goals.
But for the affection, words of encouragement, boundless love, unflagging
inspiration, interest and selfless sacrifice of my parents I would not have been what
I am today. I owe all my success to the special persons in my family.

I am inexpressibly ecstatic to extend my deep sense of gratitude to Project


manager Smt. NAMERTA SHARMA, Deutsche Gesellschaft für
Internationale Zusammenarbeit (GIZ) GmbH or GIZ, for her dexterous
guidance, illuminating suggestions and unremitting help throughout the period of
work and in completion of this case study. I owe her a huge debt of gratitude
forever for all that I got from her.
I am ineffable to express my esteemed thanks to Prof MOHAMMED AMEEN
SHAREFF, Placement officer, AFMI, for her keen interest, ardent support and
persistent encouragement showered to me.

I express my deep affection to my beloved friends whose sparkling enthustride


smile, affection and encouragement moulded me throughout my educational
career.
In finale, I thank all my well-wishers and others who helped me directly
or indirectly not placed here, for their kind cooperation and support rendered
to me.

MD

GREEN LOGISTICS PROJECT


LIST OF CONTENTS

Sl. No. Topic Page No


1 ABBREVIATIONS
PART A
1 INDUSTRY PROFILE
2 COMPANY PROFILE
PART B
1 EXECUTIVE SUMMARY
1.1 PROJECT PROFILE
1.2 ORGANISATIONAL STRUCTURE
1.3 OBJECTIVE OF STUDY
1.4 SCOPE OF STUDY
1.5 AREA OF WORK
1.6 METHODOLOGY
1.7 SWOT ANALYSIS OF CASE STUDY
1.8 LIMITATION OF WORK
2 FINDING AND DISCUSSION (QUALITATIVE &
QUANTITATIVE ANALYSIS)
2.1 ORGANIZATIONAL CONCERN
2.2 FPO BUSINESS ACTIVITY CONCERNS
3 CONCLUSION
PART C
ANNEXURE
ANNEXURE 1 SAMPLE QUESTIONNAIRE
ANNEXURE 2 LIST OF TOTAL FARMERS

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LIST OF TABLES

Table No. Topic Page No


1 Horticultural productivity in India, 2013
2 Particulars of Distribution of farmers (FIG) by Gender
in the Producer Company in detail
3 Particulars of Distribution of farmers (FIG) by Caste in
the Producer Company in detail
4 Particulars of Distribution of farmers (FIG) by
Education in the Producer Company in detail
5 Particulars of Distribution of farmers (FIG) by year of
joining in the Producer Company in detail
6 Particulars of Distribution of farmers by awareness of
role and responsibility of FIG in the Producer Company
in detail
7 Particulars of Distribution of farmers (FIG) by
statements on whether regular meetings are conducted
in the Producer Company in detail
8 Particulars of Distribution of farmers (FIG) by their
statements on type of benefits received in the Producer
Company in detail
9 Particulars of Distribution of farmers by how were
informed of the date of the AGM meeting in the
Producer Company in detail
10 Particulars of Distribution of farmers by how they were
informed about the agenda for AGM meeting in the
Producer Company in detail

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LIST OF FIGURES

Fig TOPIC Page No.


1 GVA by Agriculture and allied sectors
2 Satellite image of area of work
3 Organizational structure in the FPO
4 Communication channel & disruption in the FPO
5 Gender distribution in the FPO
6 Caste distribution in the FPO
7 Education of the farmer in the FPO
8 Year of joining of the farmer in the FPO
9 Awareness of role and responsibility of FIG in the
FPO
10 Distribution on whether regular meetings are
conducted in FIG in the FPO
11 Distribution of which type of benefits received by
the farmer in the FPO
12 Distribution of farmers by how were informed of
the date of the AGM meeting in the FPO
13 Distribution of farmers by how they were informed
about the agenda for AGM

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ABBREVIATIONS

AGM Annual General Meeting


BC Before Christ
BOD Board of Director
CEO Chief Executive officer
FAO Food and Agricultural Organization
FIG Farmer Interest Group
FPO Farmer Producer Organization
FY Financial year
GDP Gross Domestic Product
GVA Gross Value Added

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PART A
INDUSTRY PROFILE

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INDUSTRY PROFILE
Agriculture in India
The history of Agriculture in India dates back to Civilization Era and even before that in some
parts of Southern India. Today, India ranks second worldwide in farm outputs. Agriculture and
allied sectors like forestry and fisheries accounted for 13.7% of the GDP (gross domestic
product) in 2013, about 50% of the workforce. The economic contribution of agriculture to
India's GDP is steadily declining with the country's broad-based economic growth. Still,
agriculture is demographically the broadest economic sector and plays a significant role in the
overall socio-economic fabric of India.
India exported $38 billion worth of agricultural products in 2013, making it the seventh largest
agricultural exporter worldwide and the sixth largest net exporter. Most of its agriculture
exports serve developing and least developed nations. Indian agricultural/horticultural and
processed foods are exported to more than 120 countries, primarily in the Middle East,
Southeast Asia, SAARC countries, the EU and the United States.

Overview

As per the 2010 FAO world agriculture statistics India is the world's largest producer of many
fresh fruits like banana, mango, guava, papaya, lemon and vegetables like chickpea, okra
and milk, major spices like chili pepper, ginger, fibrous crops such as jute, staples such
as millets and castor oil seed. India is the second largest producer of wheat and rice, the world's
major food staples.
India is currently the world's second or third largest producer of several dry fruits, agriculture-
based textile rawmaterials, roots and tuber crops, pulses,farmed fish, eggs, coconut, sugarcan
e andnumerous vegetables. India ranked in the world's five largest producers of over 80% of
agricultural produce items, including many cash crops such as coffee and cotton, in
2010. India is one of the world's five largest producers of livestock and poultry meat, with one
of the fastest growth rates, as of 2011.
India exported $39 billion worth of agricultural products in 2013, making it the seventh largest
agricultural exporter worldwide, and the sixth largest net exporter. This represents explosive
growth, as in 2004 net export were about $5 billion. India is the fastest growing exporter of
agricultural products over a 10-year period, its $39 billion of net exports is more than double
the combined exports of the European Union (EU-28). It has become one of the world's largest
supplier of rice, cotton, sugar and wheat. India exported around 2 million metric tonnes of
wheat and 2.1 million metric tonnes of rice in 2011 to Africa, Nepal, Bangladesh and other
regions around the world. Aquaculture and catch fishery is amongst the fastest growing
industries in India. Between 1990 and 2010, the Indian fish capture harvest doubled, while
aquaculture harvest tripled. In 2008, India was the world's sixth largest producer of marine and
freshwater capture fisheries and the second largest aquaculture farmed fish producer. India
exported 600,000 metric tonnes of fish products to nearly half of the world's countries. Though
the available nutritional standard is 100% of the requirement, India lags far behind in terms
of quality protein intake at 20% which is to be tackled by making available protein rich food
products such as eggs, meat, fish, chicken, etc. at affordable prices

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India has shown a steady average nationwide annual increase in the kilograms produced per
hectare for some agricultural items, over the last 60 years. These gains have come mainly from
India's green revolution, improving road and power generation infrastructure, knowledge of
gains and reforms. Despite these recent accomplishments, agriculture has the potential for
major productivity and total output gains, because crop yields in India are still just 30% to 60%
of the best sustainable crop yields achievable in the farms of developed and other developing
countries. Additionally, losses after harvest due to poor infrastructure and unorganized retail
cause India to experience some of the highest food losses in the world.
Agriculture is the primary source of livelihood for about 58 per cent of India’s population.
Gross Value Added by agriculture, forestry and fishing is estimated at Rs 17.67 trillion (US$
274.23 billion) in FY18.
The Indian food industry is poised for huge growth, increasing its contribution to world food
trade every year due to its immense potential for value addition, particularly within the food
processing industry. The Indian food and grocery market is the world’s sixth largest, with retail
contributing 70 per cent of the sales. The Indian food processing industry accounts for 32 per
cent of the country’s total food market, one of the largest industries in India and is ranked fifth
in terms of production, consumption, export and expected growth. It contributes around 8.80
and 8.39 per cent of Gross Value Added (GVA) in Manufacturing and Agriculture respectively,
13 per cent of India’s exports and six per cent of total industrial investment.

Fig 1.GVA by Agriculture and allied sectors

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Gross Value Added by agriculture, forestry and fishing is estimated at Rs 17.67 trillion (US$ 274.23 billion) in FY18*.

Agriculture and allied sector’s GVA at constant 2011-12 prices grew a CAGR of 2.75 per cent between FY12-18.

Agriculture is the primary source of livelihood for about 58 per cent of India’s population.

As per Union Budget 2018-19, allocation of Rs 57,600 crore (US$ 8.9 billion) was made for The Agriculture Ministry.

History
Vedic literature provides some of the earliest written record of agriculture in
India. Rigveda hymns, for example, describes plowing, fallowing, irrigation, fruit and
vegetable cultivation. Other historical evidence suggests rice and cotton were cultivated in
the Indus Valley, and plowing patterns from the Bronze Age have been excavated
at Kalibangan in Rajasthan.[23] Bhumivargaha, an Indian Sanskrit text, suggested to be 2500
years old, classifies agricultural land into 12 categories: urvara (fertile), ushara (barren), maru
(desert), aprahata (fallow), shadvala (grassy), pankikala (muddy), jalaprayah (watery),
kachchaha (contiguous to water), sharkara (full of pebbles and pieces of limestone),
sharkaravati (sandy), nadimatruka (watered from a river), and devamatruka (rainfed). Some
archaeologists believe that rice was a domesticated crop along the banks of the river Ganges in
the sixth millennium BC. So were species of winter cereals (barley, oats, and wheat) and
legumes (lentil and chickpea) grown in northwest India before the sixth millennium BC. Other
crops cultivated in India 3000 to 6000 years ago, include sesame, linseed, safflower, mustards,
castor, mung bean, black gram, horse gram, pigeon pea, field pea, grass pea (khesari),
fenugreek, cotton, jujube, grapes, dates, jackfruit, mango, mulberry, and black plum Indians
might have domesticated buffalo (the river type) 5000 years ago

According to some scientists agriculture was widespread in the Indian peninsula, 10000–3000
years ago, and well beyond the fertile plains of the north. For example, one study reports 12
sites in the southern Indian states of Tamil Nadu, Andhra Pradesh and Karnataka providing
clear evidence of agriculture of pulses (Vigna radiata and Macrotyloma uniflorum), millet-
grasses (Brachiaria ramosa and Setaria verticillata), wheats (Triticum dicoccum, Triticum
durum/aestivum), barley (Hordeum vulgare), hyacinth bean (Lablab purpureus), pearl millet,
fingermillet (Eleusine coracana), cotton (Gossypium sp.), linseed (Linum sp.), as well as
gathered fruits of Ziziphus and two Cucurbitaceae.

Some claim Indian agriculture began by 9000 BC as a result of early cultivation of plants, and
domestication of crops and animals. Settled life soon followed with implements and techniques
being developed for agriculture. Double monsoons led to two harvests being reaped in one
year. Indian products soon reached trading networks and foreign crops were introduced. Plants
and animals—considered essential to survival by the Indians—came to be worshiped and
venerated.

The middle ages saw irrigation channels reach a new level of sophistication, and Indian crops
affected the economies of other regions of the world under Islamic patronage. Land and water
management systems were developed with an aim of providing uniform growth.

Despite some stagnation during the later modern era the independent Republic of India was
able to develop a comprehensive agricultural programme.

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Agriculture and colonialism

Over 2500 years ago, Indian farmers had discovered and begun farming many spices
and sugarcane. It was in India, between the sixth and four BC, that the Persians, followed by
the Greeks, discovered the famous "reeds that produce honey without bees" being grown.
These were locally called साखर, (Sākhara). On their return journey, the Macedonian soldiers
carried the "honey bearing reeds," thus spreading sugar and sugarcane agriculture. People in
India had invented, by about 500 BC, the process to produce sugar crystals. In the local
language, these crystals were called khanda (खण्ड), which is the source of the word candy.

Before the 18th century, cultivation of sugarcane was largely confined to India. A few
merchants began to trade in sugar — a luxury and an expensive spice in Europe until the 18th
century. Sugar became widely popular in 18th-century Europe, then graduated to become a
human necessity in the 19th century all over the world. This evolution of taste and demand for
sugar as an essential food ingredient unleashed major economic and social changes. Sugarcane
does not grow in cold, frost-prone climate; therefore, tropical and semitropical colonies were
sought. Sugarcane plantations, just like cotton farms, became a major driver of large and forced
human migrations in 19th century and early 20th century — of people from Africa and from
India, both in millions — influencing the ethnic mix, political conflicts and cultural evolution
of Caribbean, South American, Indian Ocean and Pacific Island nations.

The history and past accomplishments of Indian agriculture thus influenced, in part,
colonialism, slavery and slavery-like indentured labor practices in the new world, Caribbean
wars and world history in 18th and 19th centuries.

Indian agriculture after independence


In the years since its independence, India has made immense progress towards food security.
Indian population has tripled, and food-grain production more than quadrupled. There has been
a substantial increase in available food-grain per capita.

Before the mid-1960s India relied on imports and food aid to meet domestic requirements.
However, two years of severe drought in 1965 and 1966 convinced India to reform its
agricultural policy and that they could not rely on foreign aid and imports for food security.
India adopted significant policy reforms focused on the goal of food grain self-sufficiency.
This ushered in India's Green Revolution. It began with the decision to adopt superior yielding,
disease resistant wheat varieties in combination with better farming knowledge to improve
productivity. The state of Punjab led India's green revolution and earned the distinction of
being the country's bread basket. The initial increase in production was centred on the irrigated
areas of the states of Punjab, Haryana and western Uttar Pradesh. With the farmers and the
government officials focusing on farm productivity and knowledge transfer, India's total food
grain production soared. A hectare of Indian wheat farm that produced an average of 0.8 tonnes
in 1948, produced 4.7 tonnes of wheat in 1975 from the same land. Such rapid growth in farm
productivity enabled India to become self-sufficient by the 1970s. It also empowered the
smallholder farmers to seek further means to increase food staples produced per hectare. By
2000, Indian farms were adopting wheat varieties capable of yielding 6 tonnes of wheat per
hectare.

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With agricultural policy success in wheat, India's Green Revolution technology spread to rice.
However, since irrigation infrastructure was very poor, Indian farmers innovated with tube-
wells, to harvest ground water. When gains from the new technology reached their limits in the
states of initial adoption, the technology spread in the 1970s and 1980s to the states of eastern
India — Bihar, Odisha and West Bengal. The lasting benefits of the improved seeds and new
technology extended principally to the irrigated areas which account for about one-third of the
harvested crop area. In the 1980s, Indian agriculture policy shifted to "evolution of a production
pattern in line with the demand pattern" leading to a shift in emphasis to other agricultural
commodities like oilseed, fruit and vegetables. Farmers began adopting improved methods and
technologies in dairying, fisheries and livestock, and meeting the diversified food needs of a
growing population.

As with rice, the lasting benefits of improved seeds and improved farming technologies now
largely depends on whether India develops infrastructure such as irrigation network, flood
control systems, reliable electricity production capacity, all-season rural and urban highways,
cold storage to prevent spoilage, modern retail, and competitive buyers of produce from Indian
farmers. This is increasingly the focus of Indian agriculture policy.

India ranks 74 out of 113 major countries in terms of food security index. India's agricultural
economy is undergoing structural changes. Between 1970 and 2011, the GDP share of
agriculture has fallen from 43% to 16%. This isn't because of reduced importance of agriculture
or a consequence of agricultural policy. This is largely because of the rapid economic growth
in services, industrial output, and non-agricultural sectors in India between 2000 and 2010.

Agricultural scientist MS Swaminathan has played a vital role in the green revolution. In 2013
NDTV awarded him as 25 living legend of India for outstanding contribution to agriculture
and making India a food sovereign country.

Two states, Sikkim and Kerala have planned to shift fully to organic farming by 2015 and 2016
respectively.

Output

As of 2011, India had a large and diverse agricultural sector, accounting, on average, for about
16% of GDP and 10% of export earnings. India's arable land area of 159.7 million hectares
(394.6 million acres) is the second largest in the world, after the United States. Its gross
irrigated crop area of 82.6 million hectares (215.6 million acres) is the largest in the world.
India is among the top three global producers of many crops, including wheat, rice, pulses,
cotton, peanuts, fruits and vegetables. Worldwide, as of 2011, India had the largest herds of
buffalo and cattle, is the largest producer of milk and has one of the largest and fastest growing
poultry industries.

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Horticulture
The total production and economic value of horticultural produce, such as fruits, vegetables
and nuts has doubled in India over the 10-year period from 2002 to 2012. In 2012, the
production from horticulture exceeded grain output for the first time. The total horticulture
produce reached 277.4 million metric tonnes in 2013, making India the second largest producer
of horticultural products after China. Of this, India in 2013 produced 81 million tonnes of fruits,
162 million tonnes of vegetables, 5.7 million tonnes of spices, 17 million tonnes of nuts and
plantation products (cashew, cacao, coconut, etc.), 1 million tonnes of aromatic horticulture
produce and 1.7 million tonnes of flowers (7.6 billion cut flowers).

Table 0.1 Horticultural productivity in India, 2013

Average
Area under Average Area under
Vegetable
fruits Fruits Yield vegetable
Yield
Country production (Metric production
(Metric
(million tonnes per (million
tonnes per
hectares) hectare) hectares)
hectare)

India 7.0 11.6 9.2 52.36

China 11.8 11.6 24.6 23.4

Spain 1.54 9.1 0.32 39.3

United
1.14 23.3 1.1 32.5
States

World 57.3 11.3 60.0 19.7

During the 2013 fiscal year, India exported horticulture products worth ₹14,365
crore (US$2.0 billion), nearly double the value of its 2010 exports.[75] Along with these farm-
level gains, the losses between farm and consumer increased and are estimated to range
between 51 and 82 million metric tonnes a year.

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Problems
India lacks cold storage, food packaging as well as safe and efficient rural transport system.
This causes one of the world's highest food spoilage rates, particularly during monsoons and
other adverse weather conditions. Food travels to the Indian consumer through a slow and
inefficient chain of traders. Consumers buy agricultural produce in suburban markets known
as 'sabzi mandi' such as one shown or from roadside vendors.
Indian agriculture includes a mix of traditional to modern farming techniques. In some parts of
India, traditional use of cattle to plough remains in use. Traditional farms have some of the
lowest per capita productivities and farmer incomes.
Since 2002, India has become the world's largest manufacturer of tractors with 29% of world's
output in 2013; it is also the world's largest tractor market. Above a tractor in use in north India.
"Slow agricultural growth is a concern for policymakers as some two-thirds of India's people
depend on rural employment for a living. Current agricultural practices are neither
economically nor environmentally sustainable and India's yields for many agricultural
commodities are low. Poorly maintained irrigation systems and almost universal lack of good
extension services are among the factors responsible. Farmers' access to markets is hampered
by poor roads, rudimentary market infrastructure, and excessive regulation."
— World Bank: "India Country Overview 2008"
"With a population of just over 1.2 billion, India is the world's largest democracy. In the past
decade, the country has witnessed accelerated economic growth, emerged as a global player
with the world's fourth largest economy in purchasing power parity terms, and made progress
towards achieving most of the Millennium Development Goals. India's integration into the
global economy has been accompanied by impressive economic growth that has brought
significant economic and social benefits to the country. Nevertheless, disparities in income and
human development are on the rise. Preliminary estimates suggest that in 2009-10 the
combined all India poverty rate was 32 % compared to 37 % in 2004-05. Going forward, it will
be essential for India to build a productive, competitive, and diversified agricultural sector and
facilitate rural, non-farm entrepreneurship and employment. Encouraging policies that promote
competition in agricultural marketing will ensure that farmers receive better prices."— World
Bank: "India Country Overview 2011"
A 2003 analysis of India's agricultural growth from 1970 to 2001 by the Food and Agriculture
Organisation identified systemic problems in Indian agriculture. For food staples, the annual
growth rate in production during the six-year segments 1970-76, 1976–82, 1982–88, 1988–
1994, 1994-2000 were found to be respectively 2.5, 2.5, 3.0, 2.6, and 1.8% per annum.
Corresponding analyses for the index of total agricultural production show a similar pattern,
with the growth rate for 1994-2000 attaining only 1.5% per annum.
The biggest problem of farmers is the low price for their farm produce. A recent study showed
that proper pricing based on energy of production and equating farming wages to Industrial
wages may be beneficial for the farmers.
Infrastructure
India has very poor rural roads affecting timely supply of inputs and timely transfer of outputs
from Indian farms. Irrigation systems are inadequate, leading to crop failures in some parts of
the country because of lack of water. In other areas regional floods, poor seed quality and
inefficient farming practices, lack of cold storage and harvest spoilage cause over 30% of
farmer's produce going to waste, lack of organized retail and competing buyers thereby limiting
Indian farmer's ability to sell the surplus and commercial crops.

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The Indian farmer receives just 10% to 23% of the price the Indian consumer pays for exactly
the same produce, the difference going to losses, inefficiencies and middlemen. Farmers in
developed economies of Europe and the United States receive 64% to 81%.
Marketing
Agri-marketing is poorly developed in India.
Indian National Policy for Farmers of 2007 stated that "prime farmland must be conserved for
agriculture except under exceptional circumstances, provided that the agencies that are
provided with agricultural land for non-agricultural projects should compensate for treatment
and full development of equivalent degraded or wastelands elsewhere". The policy suggested
that, as far as possible, land with low farming yields or that was not farmable should be
earmarked for non-agricultural purposes such as construction, industrial parks and other
commercial development.
Amartya Sen offered a counter viewpoint, stating that "prohibiting the use of agricultural land
for commercial and industrial development is ultimately self-defeating." He stated that
agricultural land may be better suited for non-agriculture purposes if industrial production
could generate many times more than the value of the product produced by agriculture. Sen
suggested India needed to bring productive industry everywhere, wherever there are
advantages of production, market needs and the locational preferences of managers, engineers,
technical experts as well as unskilled labour because of education, healthcare and other
infrastructure. He stated that instead of government controlling land allocation based on soil
characteristics, the market economy should determine productive allocation of land.
During 2017-18* crop year, food grain production is estimated at record 284.83 million tonnes.
In 2018-19, Government of India is targeting food grain production of 285.2 million tonnes.
Milk production was estimated at 165.4 million tonnes during FY17, while meat production
was 7.4 million tonnes. As of September 2018, total area sown with kharif crops in India
reached 105.78 million hectares.
India is the second largest fruit producer in the world. Production of horticulture crops is
estimated at record 307.16 million tonnes (mt) in 2017-18 as per second advance estimates.
Total agricultural exports from India grew at a CAGR of 16.45 per cent over FY10-18 to reach
US$ 38.21 billion in FY18. In April-August 2018 agriculture exports were US$ 15.67 billion.
India is the largest producer, consumer and exporter of spices and spice products. Spice exports
from India reached US$ 3.1 billion in 2017-18. Tea exports from India reached a 36 year high
of 240.68 million kgs in CY 2017 while coffee exports reached record 395,000 tonnes in 2017-
18.
Food & Grocery retail market in India was worth US$ 380 billion in 2017.
Investments
According to the Department of Industrial Policy and Promotion (DIPP), the Indian food
processing industry has cumulatively attracted Foreign Direct Investment (FDI) equity inflow
of about US$ 8.57 billion between April 2000 and June 2018.Some major investments and
developments in agriculture are as follows:
The first mega food park in Rajasthan was inaugurated in March 2018.
In 2017, agriculture sector in India witnessed 18 M&A deals worth US$ 251 million.
A loan agreement of US$ 318 million was signed between the Government of India,
Government of Tamil Nadu and the World Bank in December 2017 for the ‘Tamil Nadu

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Irrigated Agriculture Modernization Project' through which is expected to benefit around
500,000 farmers in the state.

Government Initiatives
Some of the recent major government initiatives in the sector are as follows:

 In September 2018, the Government of India announced Rs 15,053 crore (US$ 2.25
billion) procurement policy named ‘Pradhan Mantri Annadata Aay SanraksHan
Abhiyan' (PM-AASHA), under which states can decide the compensation scheme and
can also partner with private agencies to ensure fair prices for farmers in the country.
 In September 2018, the Cabinet Committee on Economic Affairs (CCEA) approved an
Rs 5,500 crore (US$ 820.41 million) assistance package for the sugar industry in India.
 As of March 2018, the Government is working on a plan to provide air cargo support
to promote agriculture exports from India.
 The implementation of Pradhan Mantri Fasal Bima Yojana (PMFBY) will be made
faster and the government is aiming to increase the coverage under the scheme to 50
per cent of gross cropped area in 2018-19.
 The Government of India is going to provide Rs 2,000 crore (US$ 306.29 million) for
computerisation of Primary Agricultural Credit Society (PACS) to ensure cooperatives
are benefitted through digital technology.
 Around 100 million Soil Health Cards (SHCs) have been distributed in the country
during 2015-17 and a soil health mobile app has been launched to help Indian farmers.
 With an aim to boost innovation and entrepreneurship in agriculture, the Government
of India is introducing a new AGRI-UDAAN programme to mentor start-ups and to
enable them to connect with potential investors.
 The Government of India has launched the Pradhan Mantri Krishi Sinchai Yojana
(PMKSY) with an investment of Rs 50,000 crore (US$ 7.7 billion) aimed at
development of irrigation sources for providing a permanent solution from drought.
 The Government of India plans to triple the capacity of food processing sector in India
from the current 10 per cent of agriculture produce and has also committed Rs 6,000
crore (US$ 936.38 billion) as investments for mega food parks in the country, as a part
of the Scheme for Agro-Marine Processing and Development of Agro-Processing
Clusters (SAMPADA).
 The Government of India has allowed 100 per cent FDI in marketing of food products
and in food product e-commerce under the automatic route.

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The required level of investment for the development of marketing, storage and cold storage
infrastructure is estimated to be huge. The government has not been able to implement schemes
to raise investment in marketing infrastructure. Among these schemes are 'Construction of
Rural Godowns', 'Market Research and Information Network', and 'Development /
Strengthening of Agricultural Marketing Infrastructure, Grading and Standardization'.
The Indian Council of Agricultural Research (ICAR), established in 1905, was responsible for
the search leading to the "Indian Green Revolution" of the 1970s. The ICAR is the apex body
in agriculture and related allied fields, including research and education. The Union Minister
of Agriculture is the president of the ICAR. The Indian Agricultural Statistics Research
Institute develops new techniques for the design of agricultural experiments, analyses data in
agriculture, and specializes in statistical techniques for animal and plant breeding.
Recently (May 2016) the government of India has set up the Farmers Commission to
completely evaluate the agriculture programme. Its recommendations have had a mixed
reception.
In November 2011, India announced major reforms in organized retail. These reforms would
include logistics and retail of agricultural produce. The announcement led to major political
controversy. The reforms were placed on hold by the government in December 2011.
In the summer of 2012, the subsidized electricity for pumping, which has caused an alarming
drop in aquifer levels, put additional strain on the country's electrical grid due to a 19% drop
in monsoon rains and may have contributed to a blackout across much of the country. In
response the state of Bihar offered farmers over $100 million in subsidized diesel to operate
their pumps.
In 2015, Narendra Modi announced to double farmer's income by 2022.
Startups with niche technology and new business models are working to solve problems in
Indian agriculture and its marketing. Kandawale is one of such e-commerce website which sells
Indian Red Onions to bulk users direct from farmers, reducing unnecessary cost escalations.
Road Ahead

India is expected to achieve the ambitious goal of doubling farm income by 2022. The
agriculture sector in India is expected to generate better momentum in the next few years due
to increased investments in agricultural infrastructure such as irrigation facilities, warehousing
and cold storage. Furthermore, the growing use of genetically modified crops will likely
improve the yield for Indian farmers. India is expected to be self-sufficient in pulses in the
coming few years due to concerted efforts of scientists to get early-maturing varieties of pulses
and the increase in minimum support price.
The government of India targets to increase the average income of a farmer household at
current prices to Rs 219,724 (US$ 3,420.21) by 2022-23 from Rs 96,703 (US$ 1,505.27) in
2015-16.
Going forward, the adoption of food safety and quality assurance mechanisms such as Total
Quality Management (TQM) including ISO 9000, ISO 22000, Hazard Analysis and Critical
Control Points (HACCP), Good Manufacturing Practices (GMP) and Good Hygienic Practices
(GHP) by the food processing industry will offer several benefits.
References: Agricultural and Processed Food Products Export Development Authority
(APEDA), Department of Commerce and Industry, Union Budget 2018–19, Press Information
Bureau, Ministry of Statistics and Programme Implementation, Press Releases, Media Reports,
Ministry of Agriculture and Farmers Welfare, Crisil

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COMPANY PROFILE

The Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH or GIZ in


short (English: German Corporation for International Cooperation GmbH is
a German development agency headquartered in Bonn and Eschborn that provides services in
the field of international development cooperation. GIZ mainly implements technical
cooperation projects of the Federal Ministry for Economic Cooperation and
Development (BMZ), its main commissioning party, although it also works with the private
sector and other national and supranational government organizations (but usually not
with non-governmental organizations) on a public benefit basis. In its activities GIZ seeks to
follow the paradigm of sustainable development, which aims at balancing economic
development with social inclusion and environmental protection. GIZ offers consulting
and capacity building services in a wide range of areas, including management consulting,
rural development, sustainable infrastructure, security and peace-building, social development,
governance and democracy, environment and climate change, and economic development and
employment.
GIZ was established on January 1, 2011, through the merger of three German international
developmentorganizations: the Deutscher Entwicklungsdienst (DED), the Deutsche
Gesellschaft für Technische Zusammenarbeit (GTZ), and Internationale Weiterbildung und
Entwicklung (InWEnt). GIZ is one of the world's largest development agencies, with a
business volume in excess of €2.4 billion in 2016 as well as 19,506 employees spread over
more than 120 countries. Additionally, in cooperation with the German Federal Employment
Agency, GIZ operates the Centre for International Migration and Development (CIM), an
agency specialized on international cooperation activities related to global labor mobility.

Organisation

GIZ's headquarters are located in Bonn and Eschborn. It also has a representation in Berlin and
offices at 16 other locations across Germany. Outside Germany, the company has a
representation in Brussels and operates 90 offices around the world.
Because GIZ is incorporated under German law as a GmbH (limited Liability Company), it is
governed by a management board that acts on behalf of the company's shareholders and is
monitored by a supervisory board. Additionally, GIZ also has a Board of Trustees and a Private
Sector Advisory Board. GIZ's management board consists of four managing directors and is
chaired by Tanja Gönner (January 2017), while the Federal Republic of Germany (represented
by the Federal Ministry for Economic Cooperation and
Development (BMZ) and the Federal Ministry of Finance
(BMF)) is GIZ's sole shareholder. The organization is
structured into eight corporate units (Corporate
Development; Corporate Communications; Legal Affairs
and Insurance; Compliance and Integrity; Auditing;

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Evaluation; Corporate Security; Academy for International Cooperation (AIZ)) and ten
departments (Commissioning Parties and Business Development; Sectoral Development;
Sector and Global Programmes; Africa; Asia, Latin America, Caribbean; Europe,
Mediterranean, Central Asia; International Services; Human Resources).
GIZ holds a 49% share in Sequa gGmbH, the implementing partner of the German business
community, in line with the company's objective to foster private sector development and
cooperate closely with business chambers and associations abroad. Moreover, GIZ is a member
of the European Network of Implementing Development Agencies (EUNIDA), which was co-
founded by GTZ in 2000. The registered offices of GIZ are in Bonn and Eschborn. In 2017,
we generated a business volume of around 2.6 billion euros. Our 19,506 employees, almost 70
per cent of whom are national personnel, work in around 120 countries. As a recognized
development service provider, we currently have 590 development workers in action in partner
countries. Furthermore, in 2017, the Centre for International Migration and Development
(CIM), which is run jointly by GIZ and the Federal Employment Agency, placed 385 integrated
experts and 484 returning experts with local employers in our partner countries, or provided
them with financial support, advice or other services.*
*Personnel and business figures as at 31 December 2017

Management Board

Together with the shareholder and the supervisory board, the management board is one of the
three statutory organs of a company in GmbH form (private limited company). The GIZ
Management Board is composed of the Chair of the Management Board, Tanja Gönner, and
the Vice-Chair of the Management Board, Christoph Beier:

 Tanja Gönner (Chair of the Management Board)


 Christoph Beier (Vice-Chair of the Management Board)

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Identity

Vision
We work to shape a future worth living around the world.

Mission Statement
We manage change.

We work holistically, draw on extensive implementation experience and share responsibility


for achieving objectives with our partners

We provide know-how.

Our services are built on a wealth of regional and technical competence and tried and tested
management expertise.

We develop solutions.

We use our wide range of instruments and networks flexibly and innovatively to create value
for our commissioning parties and to empower people to shape their own development
processes.

We act as an intermediary.

Our core competencies include balancing diverse interests in sensitive contexts and providing
entry points for the private sector and civil society.

We are value-driven.

As a federally owned enterprise, we are guided by the principles of our social order, act in the
interests of Germany and, first and foremost, support the development policy of the German
Government.

We advise policymakers.

At home and abroad, we help decision-makers accomplish their political objectives.

We secure results.

Our work is about producing results in a transparent, efficient and partneroriented way and in
line with good commercial practice.

We are a global player.

Decentralized structures, intercultural competence and a highly professional workforce are the
factors that fuel our success.

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Corporate Values
Our actions are guided by the principles of sustainability.

We believe that only by combining social responsibility, ecological balance, political


participation and economic capability will current and future generations be able to lead secure
and dignified lives.

Conflicting goals and interests have to be resolved fairly among all stakeholders. Negotiation
processes of this kind must be professionally designed if development is to be sustainable.

This belief guides our work with clients and partners, our interactions with each other, and the
way we structure our operations.

We perform our tasks in keeping with these convictions and are committed to upholding the
values enshrined in the Basic Law of the Federal Republic of Germany.

In particular, we:

 advocate respect for human rights, equal opportunities and integrity;


 support the rule of law and civic participation and are committed to ensuring fair
negotiation processes, both within and outside the company;
 Promote a market-oriented, ecological and social economic order and observe the
principles of corporate responsibility in our work.

Activities
Products and expertise
GIZ has a wealth of international experience. We deliver advisory services and projects in more
than 130 countries around the globe.

GIZ's considers capacity development to be its core competence. The company's services are
grouped into eight so-called "product areas" (as of January 2017):

1. Methods:
1. Advisory services: management of complex projects and programs (Capacity
WORKS); development partnerships with the private sector; social impact
assessment;
2. International competency development: e-learning, e-coaching, and e-
collaboration; Leadership Development Workshop; key qualifications for
international cooperation; strengthening training in partner countries (capacity
to build capacity); training specialists and managers from partner
organisations;

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3. Networking, dialogue and moderation: network management; alumni
networks without borders; twinning (EU administration partnerships);
stakeholder dialogues; competition management; knowledge sharing;
4. Management and logistics: grants; fund management; public
procurement; knowledge-based services; evaluation; results-based
monitoring; Systemic Quality Improvement (SQI);
2. Rural Development:
1. Agricultural policy and food: agricultural policy; rural development; land
management; food and nutrition security/right to food;
2. Agricultural trade, agricultural economy, standards: standards and food
safety; agricultural trade; value chains; fisheries, aquaculture, and coastal
zones; local and regional development;
3. Agricultural production and resource use: sustainable use of natural
resources and production systems in agriculture; agricultural research,
innovations, education and extension; water and agriculture; climate change
and agriculture; biological diversity;
3. Sustainable Infrastructure:
1. Water: in the field of water, sub-topics include sustainable sanitation and water
supply, water policy, water resources management, water and the nexus
between water and agriculture;
2. Energy: basic energy supply services (rural electrification, solar lanterns,
etc.), renewable energy; energy efficiency; international energy policy;
3. Transport and infrastructure: transport policy and infrastructure
management; sustainable urban mobility;
4. Security, Reconstruction and Peace:
1. Emergency aid and disaster risk management: disaster risk management;
food security in the context of conflicts and disasters; reconstruction for crisis
prevention;
2. Peace and security: security sector reform; crisis prevention
and peacebuilding;
5. Social development:
1. Health: health promotion; improving sexual and reproductive health;
strengthening health systems; HIV and health;
2. Education: quality education for a better future; training and capacity building
for teachers;
3. Social protection: social health protection; strategies to implement social
justice;
6. Governance and Democracy
1. Democracy and the rule of law: democracy promotion; good
governance, gender; corruption prevention; human rights; law and justice;
promoting citizen involvement;
2. Decentralization and urban development: decentralization; urban and
municipal development;
3. Public finance and administration: Public finance reform; public
administration; strengthening good governance in the extractive sector
(e.g. EITI);

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7. Environment and climate change:
1. Climate change: climate change (implementation of the UN Framework
Convention on Climate Change); integrated ozone and climate protection;
2. Natural resource management: forest policy and sustainable forest
management; combating desertification (e.g. based on the UN Convention to
Combat Desertification); biological diversity (implementation of the UN
Convention on Biological Diversity);
3. Urban and industrial environmental management: waste and recycling
management; resource efficient economy; sustainable tourism;
4. Environmental policy: environmental policy; environmental finance; regional
environmental cooperation; green economy;
8. Economic development and employment:
1. Labor market and TVET: Labour-market oriented TVET systems; skills
development for secure livelihoods; promoting sustainable employment
and employment policies (including occupational safety and health, labor
rights, unionization, etc.);
2. Financial system development: microfinance; rural finance, financing
agriculture and SMEs; insurance; financial sector stability and capital market
development;
3. Private sector: private sector development; supporting value chains; local and
regional economic development; shaping migration;
4. Economic policy: economic policy advice for sustainable economic
development; trade; quality infrastructure and consumer protection; green
economy; regional economic integration;
GIZ has been involved in the creation of various networks, associations and portals, and may
carry out or support secretariat functions for some of these for a limited period of time.
Examples of such networks and associations that have had some GIZ involvement include:

 Renewable Energy Policy Network for the 21st Century (REN21)


 BIOPAT
 Alumni portal Germany
 Sustainable Sanitation Alliance
Other global agendas supported by GIZ include South-South cooperation, i.e. bilateral
cooperation between developing countries and emerging economies, and triangular
cooperation between developing countries as beneficiaries, emerging economies as "new
donors" and traditional donors, e.g. Germany, as contributors of expertise.
GIZ works closely with the German government-owned development bank KfW, which is
based in Frankfurt. While GIZ implements those projects on behalf of the BMZ that belong to
"technical cooperation", i.e. capacity development, the KfW implements those BMZ projects
belonging to "financial cooperation".
GIZ is currently represented in the SuRe® Stakeholder Council.SuRe® – The Standard for
Sustainable and Resilient Infrastructure is a global voluntary standard which integrates key
criteria of sustainability and resilience into infrastructure development and upgrade. SuRe® is
developed by GIB Foundation and Natixis as part of a multi-stakeholder process and will be
compliant with ISEAL guidelines.
Finally, GIZ also hosts the Eschborn Dialogue, a two-day event that offers international experts
a forum to exchange knowledge and experiences on a given topic in international cooperation

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(e.g. "World in motion: mobility, migration, digital change" in 2014 or "Raw materials and
resources: growth, values, competition" in 2013). The Eschborn Dialogue has been organized
each year since 1988.

Quality, results and evaluation

High quality and effectiveness are the two most important features of GIZ’s work. We assure
the quality of our services through EFQM-based quality management and our Capacity
WORKS management model. We demonstrate our effectiveness through monitoring and
evaluation.

Quality is measured both in terms of how good a product or a service is and in terms of client
satisfaction. To ensure that we provide high quality services and continually improve our work,
we use a quality management system based on the internationally recognized model of the
European Foundation for Quality Management (EFQM). Thanks to our quality management
system we can meet both the requirements of our commissioning parties and the quality
standards laid down in our internal regulations.

This includes ensuring that our results are sustainable as well as guaranteeing a high level of
efficiency and effectiveness in the services we deliver.

Steering projects to achieve objectives


Capacity WORKS is GIZ’s management model for sustainable development. It is designed to
help manage and steer projects and programmes so that an effective and sustainable
contribution is made to developing the capacities of individuals, organisations and institutions
in our partner countries.

Monitoring and evaluation provide evidence of results


For GIZ to be commercially successful as a service provider in the field of international
cooperation, it is essential that we provide evidence of the effectiveness of our work. In this
way our commissioning parties and the general public can be sure that we are making a real
contribution to sustainable development. Monitoring and evaluation are therefore fully
integrated into the process of managing contracts and cooperation at GIZ.

GIZ’s projects and programmes are regularly reviewed to assess their quality, effectiveness
and cost-effectiveness. This enables us to learn from our experiences, ensure effective project
management and achieve sustainable results.

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Quality management

Quality is measured both in terms of how good a product or a service is and in terms of client
satisfaction. GIZ’s quality management system has the task of designing the company’s
guidelines, regulations, procedures and management processes such that we are able to deliver
top-quality services.

GIZ endeavors to consistently improve its services and in-house processes. We apply a quality
management system and systematically analyze our work and the results it generates. This
makes what we do more effective and more economically efficient and improves our
accountability vis-à-vis our commissioning parties.

GIZ’s ‘Quality House’


We have put in place a model internal framework for monitoring and improving quality, known
as GIZ’s Quality House. The quality features on which this model is based have been taken
from the European Foundation for Quality Management (EFQM) criteria and correspond to the
five success factors laid out in GIZ’s own Capacity WORKS management model.

GIZ’s quality features are:

1. Values geared to sustainability


2. Economic use of resources
3. Efficient steering
4. Compliance with rules and regulations
5. Positive results achieved

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Evaluation
‘Knowing what works’ is the principle behind GIZ’s evaluations. We want to know what
impact our work has, what works well and what does not, and find out how and why. And we
want to use this knowledge to improve our projects, our service provision, and our processes
and structures. GIZ’s evaluation policy therefore focuses on what we see as a central function
of evaluations: in the complex world of international cooperation, they are designed to generate
information that helps us make better decisions, be accountable and support GIZ’s ongoing
development as a learning organisation.

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GIZ INDIA
For over 60 years, the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH
has been working jointly with partners in India for sustainable economic, ecological, and social
development. Currently 277 national and 44 international employees, and 10 integrated
specialists are working in the country (as of 31.12.2017).
India is fast emerging as an economic and industrial power. It is a member of the ‘Group of
Twenty’ (G20) as well as one of the five major emerging national economies, namely Brazil,
Russia, India, China and South Africa (BRICS). Despite the country’s rapidly growing
economy, poverty and other socio-economic issues remain a challenge. The burgeoning
population and accelerated urbanization in the country have resulted in an environment at risk
and greenhouse gas emissions that continue to spiral upwards.
The thematic areas of GIZ in India are:

 Energy
 Environment, Climate Change and Biodiversity
 Sustainable Urban and Industrial Development
 Sustainable Economic Development

The Federal Ministry for Economic Cooperation and Development (BMZ), the Federal
Ministry of the Environment, Nature Conservation and Nuclear Safety (BMU) as well as the
Federal Ministry for Economic Affairs and Energy (BMWi) are the main commissioning
parties of GIZ in India. Other clients include Indian public sector clients, the European Union
and foundations.

The Government of India has launched numerous important initiatives to address the country’s
economic, environmental and social challenges, and GIZ is contributing to some of the most
significant ones. For example, it supports key initiatives such as Smart Cities, Clean India and
Skill India. GIZ, in close cooperation with Indian partners, devises tailor-made, jointly-
developed solutions to meet local needs and achieve sustainable and inclusive development.

Focus areas of work in India GIZ provides high quality advice and capacity building. In
India, it focuses on the following sectors:

Energy – Supporting energy efficiency in power generation and its consumption. Exploring
and main streaming renewable energy options to mitigate carbon emissions.
Sustainable Economic Development –
• Financial Systems Development – Improving outreach of Indian financial institutions in rural
areas, developing mechanisms for safe and rapid fund transfer and advancing consumer
education on use of financial services.
• Private Sector Development – Promoting Corporate Social Responsibility (CSR) in India,
encouraging regional economic development in selected sectors and enabling small and
medium enterprises to increase their competitiveness.

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Skills Development – Supports the Indian Government in establishing a cooperative workshop-
based system for vocational education and the inclusion of enterprises in the training process,
thus strengthening the role of the private sector. Replicable models of cooperative vocational
education will be implemented in three sectors in cooperation with the private sector.
• Social Protection – Developing innovative social security solutions, particularly for the poor
and disadvantaged focussing on health and pensions.
Environmental Policy, Conservation and Sustainable Use of Natural Resources –
• Natural Resource Management – Supporting the adaptation to Climate Change, promoting
financial incentives for value addition and securing livelihoods through sustainable use of
biodiversity.
• Sustainable Habitat and Industrial Development – Supports the government to develop of
capacities for good governance in the environmental sector, especially with the planning and
implementation of an efficient, eco-friendly industrial production and its monitoring. It will
also target resource efficient production in individual industries and undertake capacity
development including introducing relevant policy measures and skills development of
personnel. Further, private and state institutions shall jointly implement strategies for efficient,
climate-friendly industrial development. The project will create practical examples of
management and planning for sustainable industrial zones supporting women.
• Biodiversity – Supports ‘The Economics of Ecosystems and Biodiversity (TEEB) India
Initiative’ (TII) to make the economic values of biodiversity and associated ecosystem services
explicit, and to enable their mainstreaming into development, planning and decision-making.
This also includes advising and assisting Indian businesses – through the India Business and
Biodiversity Initiative (IBBI) - on how to incorporate sustainable biodiversity management into
their business operations.
Another component of the programme focusses on Forest Ecosystem Services (FESS) in
Himachal Pradesh. It will integrate recommendations and findings from the TII into the
development of policies for conservation and sustainable use of forest ecosystems. The
programme will support the Himachal Pradesh Forest Department in valuation of biodiversity
and ecosystem services through measures like Long Term Ecological Monitoring (LTEM),
drafting of FESS guidelines, management plans for forest districts, and monitoring instruments.

PROJECTS AND PROGRAMMES

RENEWABLE ENERGIES AND ENERGY EFFICIENCY

India Wicket Energy Indo-German Energy Programme - Energy Efficiency Indo-German Energy
Programme (IGEN)Commercialisation of solar energy in urban and industrial areas
(ComSolar) Indo-German Energy Forum (IGEF) (BMWi)Solar mapping and monitoring Indo-
German Energy Programme – Green Energy Corridors (IGEN-GEC)Indo-German Energy
Programme - Access to Energy in Rural Areas (IGEN-Access)Integration of Renewable
Energies into the Indian Electricity System (I-RE)

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ENVIRONMENT AND CLIMATE CHANGE
Environment, Climate Change and Natural Resource Management

Human-Wildlife Conflict Mitigation in India Global Carbon Market Development and


management of nationally appropriate mitigation actions (NAMAs)Indo-German Environment
Programme in Rural Areas (IGEP-RA)Climate Change Adaptation in Rural Areas of India
(CCA-RAI)Umbrella Programme for Natural Resource Management Climate Change
Adaptation – North Eastern Region of India (CCA-NER)Environmental Benefits of the
Mahatma Gandhi National Rural Employment Guarantee Act Innovation centres for the
agriculture and food sector Soil protection and rehabilitation for food security Green
Innovation centres for the agriculture and food sector Conservation and Sustainable Use of
Biodiversity Protecting biodiversity in marine and coastal areas Biodiversity and ecosystem
services in agrarian landscapes
SUSTAINABLE INFRASTRUCTURE

Land Use Planning and Management (LUPM)Waste to Energy (W2E)Urban Transport


Systems for Smart Cities Sustainable and environment-friendly industrial production Climate
change adaptation in industrial areas Urban sanitation
ECONOMIC DEVELOPMENT AND EMPLOYMENT

Private Sector Development


Indo-German Programme for Vocational Education and Training Global Project Quality
Infrastructure – India Responsible Enterprise Finance Innovation Promotion in Micro, Small
and Medium-sized Enterprises (MSME)Indo-German Social Security Programme Programme
"Migration for Development"
COMPLETED PROJECTS AND PROGRAMMES
SUSTAINABLE INFRASTRUCTURE

Inclusive Cities Partnership Programme (ICPP)Resource efficiency and secondary raw


materials management as a contribution to climate change mitigation Renewable energy supply
for rural areas (BMUB)Indo-German tri generation project (BMUB)
SOCIAL DEVELOPMENT

Support for the reform of the Indian blood transfusion system


GOVERNANCE AND DEMOCRACY

Managing for development results


ENVIRONMENT AND CLIMATE CHANGE

Conversion of the production of split and window-type air conditioners to hydrocarbon


technology (BMU)Gujarat forestry development project Preserving biodiversity in the Kailash
region Climate Change Adaptation in Rural Areas of India (CCA-RAI)Socio-economic
empowerment of tribal and rural poor and protection of natural resources, Tripura Clean
Development Mechanism (CDM) Joint Implementation

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ECONOMIC DEVELOPMENT AND EMPLOYMENT

Development “Consumer Insurance and risk management in rural areas , Development of rural
finance Support for Skills Development, Regional energy efficiency programme, South Asia
State Partnership Programme with Chhattisgarh (European Commission), Establishing
vocational training centres in Gujarat , Regional Economic Development, Uttarakhand Indo-
German Corporate Social Responsibility Initiative

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PART –B
1.EXECUTIVE SUMMARY

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“Farmers’ Organizations are essential institutions for empowerment, poverty alleviation
and advancement of farmers and rural poor”
(FAO, 2006)
1. EXECUTIVE SUMMMARY

India is the world largest producer of many vegetables but there still exists huge gap between
per capita demand and supply due to enormous wastage during postharvest handling &
marketing. These losses are a missed opportunity to recover value for the benefit of farmers.
The deploying of appropriate strategic and operating models, will allow the efficient closure of
gaps between demand and supply so as to contribute to doubling farmers’ income. The gaps
between demand and supply are primarily due to ineffective market links and lack of
consolidation on both the demand-side and supply-side. On the supply side, the government
has agenda to promote modern cultivation practices, lower input costs and most importantly to
counter fragmentation of farm lands by promoting FPOs (Farmer Produce Organisations) for
collaborative farming. FPOs are commercial enterprises formed by partnering a minimum of
1000 farmers.

The Farmer Produce Organisation (FPO) model is differentiated from other operating models
– FPO concept was conceived with the intention to strengthen the negotiation process of
farmers through developing a judicious economy of scale at the farm-gate. This infers that
farmers will collaborate on the supply side of the (for production and post-harvest market
connectivity) business. The perceived economy of scale needs to essentially translate into a
viable logistical capacity on the following principal fronts.

a. Raw Inputs (e.g. assured volume of fertilizer and planting material for incremental
reduction in input costs)
b. Farm mechanisation (e.g. contiguous farming can lead to viable deployment of combine
harvester – incremental optimisation of labour)
c. Post-harvest Infrastructure (e.g. capacity utilisation is justified for pack houses, grain
silos, transportation, etc. – a transformational change in the supply chain)
d. Market access & connectivity (e.g. control of value chain system shifts into
hands of FPOs once meaningful scale is achieved for transactions on both supply and inputs)

At the moment, in its first phase of development, the FPO formation has primarily
been focused on clubbing interested farmers together, to avail options of equity and credit
support. This support is expected to translate into professional management for production and
market linkages. This may also need to be matched with allied development efforts to persuade
members of FPOs to achieve a relevant scale of operations through collaborative farming. The
central support to form and strengthen FPO may require for closer participation from State
governments. FPOs are currently not formed on basis of preferred crop type (vegetables) or
with bias for availability of contiguous land. In the next phase of
development, FPOs may be identified on basis of availability of contiguous arable
land, with aim to provide related soil analysis / inputs, a set of common crop type
and to establish long term market linkage for selected 4 to 6 crop types. This next

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step in FPO development will require coordination of efforts at State level with
central support. It is to note that FPOs can also be created for a group of farmers in close
proximity to urban centres, however, the economy of scale from collaborative farming will not
be readily manifested unless landholding is contiguous. A large scale FPO is an enterprise
intended to generate a minimum economy of scale at farm-gate and need not be confused with
a cluster of individual farms, located in proximity to a city (ready markets at short distance).

Horticulture sector as in rest of the India is an unorganized sector in Karnataka also. Hence,
an effort is being made to organize the farmers into the groups under various programmes of
the Department of Horticulture from 2012-13 onwards. Since then the farmers have been
mobilized to work in groups from seed to marketing, adopting Good Management Practices
(GMP) from production up to post harvest management. In the context of 2014 being declared
as “Year of Farmer Producer Organizations (FPOs)” by the Ministry of Agriculture,
Government of India, greater attention was given to these emerging bodies. The Department
of Horticulture, Government of Karnataka has initiated formation of FPO during the year 2014-
15 with the support of FPO nodal agency Small Farmers Agribusiness Consortium (SFAC),
New Delhi by mobilizing the Farmer Clusters already formed by the Department and other
farmers into the larger groups of 1000 members to form a Farmer Producer Company under
Companies Act 2013.

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1.1 PROJECT PROFILE
Project Name-GREEN LOGISTIC PROJECT

A study on “Yagachi farmer Producer Company Limited” situated at kanayakanahalli,


Belur, Hassan, Karnataka,
.
Total sample size- 150 farmers
7 BODs
& CEO

PROJECT FLOW

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1.2 ORGANISATIONAL STRUCTURE

There are 3 main stakeholder in FPO

1.3 OBJECTIVE OF STUDY


Current status of FPO regarding communication, business, awareness,
Find out legal compliances
Satisfaction level experienced by FIGs for input supply, custom hiring, output business
Assess the expectations
Potential strengthening areas
Relationships between FPO and FIGs
Role and Responsibilities of BODs & CE0

1.4. SCOPE OF THE STUDY


The results of the study on producer companies from Yagachifarmer Producer Company
Limited, kanayakanahalli, Belur, Hassan, Karnataka should be useful for the development
stakeholders, producers and policy makers as a preliminary stock of the situation. Analysis of
the farmer producer companies would be useful to rectify the issues by the FPCs and others
can learn from the experiences. The finding of the study are also useful to find new ways for
business and integrating farmers.

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1.5. AREA OF WORK

The study on producer companies from Yagachifarmer Producer Company Limited,


kanayakanahalli, Belur, Hassan, Karnataka with the following FIGs.

Sl No. NAME OF FIG VILLEGE SAMPLE


SIZE
1. Bhudda Tharakari Belegarara Sangha Shettigere 10
2. Sree Hasiru sene Tharakari Belegarara Sangha Muthuuganne 10
3. Sree Basaveshwara Tharakari Belegarara Mallanahalli 10
Sangha
4. Sri Lokadamma Tharakari Belegara Sangha Doddabydigere 10
5. Sri Channa basaveshwara Tharakri Belegarar Hebbalu 10
Sangha
6. Vigneshwara Tharakari Belegarara Sangha Kanayakanahalli 10
7. Shambhu lingeshwara Tharakari belegara Koratikere 10
Sangha
8. Theertha Mallikarjuna Tharakari Belegara chelanayakanahalli 10
Sangha
9. Sri Chatachetteshwara Tharakari Belegarara Chatachettey halli 10
Sangha
10. Sree Kariyamma devi Mahila Tarakari Nanjapura 10
belegarara Sangha
11. Sri Ramanjineya Tharakari Belegarara Sangha Nanjapura 10
12. Sri, Manjunatha Tharakari Belegarara Sangha Chatchattihalli 10
13. Sri pragathipara Raitha Tharakari Belegarara Doddabydigere 10
Sangha
14. Sri Manjunath Tharakari Belegarara Sangha Samshetty halli 10
15. Shri Maruthi Tharakari Belegarara Sangha Dyavappanahalli 10

Fig 2.Satelite image of area of work

GREEN LOGISTICS PROJECT


1.6. METHODOLOGY

STEP 1: Ground work

 Go through Details Government studies about FPO.


 Find out details about Yagachi farmer producer company
 Reason & process behind Govt. intervention.

STEP 2: Introduction

 Name of the executive


 Name of the company
 Introduction about the company
 Study on the formation process FPO
 Working Process of FPO
 Reason behind formation of FIG
 Formation process of FIG
 Reason behind selection of BODs
 Selection process of BODs
 Selection of CEO
 Process followed in providing FPO services(Input supply, custom hiring, output
marketing & credit facility)
 Access to government schemes

STEP 3: Data collection (Formal–Questionnaire, Informal)

 Farmer(137)
 BODs(14)
 CEO

STEP 4: Qualitative and Quantitative Analysis


FIG
BOD & CEOs
AGM
STEP 5: Suggestion

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1.7. SWOT ANALYSIS OF THE CASE STUDY

STRENGTH WEAKNESS
1.Direction for policy maker(Dept. of 1. Sample size of case study is a limitation.
Horticulture) 2.Predefined questionnaire
2.Guide to know Original situation of FPO 3. Exploit only some of the areas.
around Karnataka 4.Biased in Gender in sample size
3.Originality in content 5.Biased in caste in sample size
4. Helpful to know existing problems and 6. Difficult to get the farmers interview.
correction measures. 7. Lack of interest of giving information.
5.

OPPORTUNITY THRETS
1.Useful for further studies 1. Answers of sample is highly politically
2.Exploring new sector like credit society motivated.
3. Use as a linkage between farmer and Govt. 2. High time consuming study.

1.3. LIMITATIONS OF THE STUDY


Within the limited time period available for this study, only 150 out of around
1000 member could be covered. So, the small sample size is a critical limitation of this study.
However, through purposive sampling an effort has been made to include members from a
diverse range of areas. Since the FPO is in operation from the past three years the findings can
be broad and evolving

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1. FINDING AND DISCUSSION.(QUALITITATVE ANALYSIS)

GREEN LOGISTICS PROJECT


2. FINDING AND DISCUSSION.(QUALITITATVE ANALYSIS)

There are 3 major stake holder in FPOs

There are major concerns in various level within the stake holders. The details finding are
discussed in details.

2.1.ORGANIZATIONAL CONCERNS

A. FIG RELATED:
AWARNESS:
 The FIG members don’t having any knowledge about structural of
FIGs
 No knowledge about role and function of FIGs.
 The members having no knowledge about FPO functions
 Expectation are only limited to direct subsidy

COMMUNICATION

FIG
BOD members
representative

FIG
BOD members
Representative

Fig 4. Communication channel & disruption in the FPO

There are very serious communication disruption between BOD & FIG Representatives,
FIG Representative and members & BODs and members.

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MEETINGS
There are no integration in the FIGs, No meeting was held according to maximum
members
LEGAL COMPLIANCE

I. There are some legal concerns regarding members without land


(which is mandatory with producer company act)
II. No knowledge regarding nominees, and change the ownership about
their share.

SUGESSTIONS:
 There should be grass root level awareness about their rights as shareholders,
 BODs and CEOs should find effective communication channel to
communicate with members.
 Share what is FPO all about.
 Educate about their profit and benefits in FPO

B. BODs and CEOs RELATED CONCERN

BODs
Positive vibes
Good coordination and understanding between themselves
Having good intension for forward looking, helping farmers
In sample BODs, maximum gone through orientation/training (5 out of 7)
Maximum BODs attained all the board meetings(except the female BODs)
Looking forward for learning business and marketing affairs
Represent the interest of FIG which they represent

Concerns
It is not an elected body (even some are choose by lottery)
Female BOD is just for name’s sake(even though she is in standing committee, and no
DSC and DIN compliance(According to her, but according other BODs DSC and DIN
is done for Standing committee members), not knowing which FIG she represents, not
attended all the meetings, no training or orientation)
Some BODs having conflicts with some FIG representatives(According to ACT A
Member, who acquires any business interest which is in conflict with the business of
the Producer Company, shall cease to be a Member of that Company and be removed
as a Member in accordance with articles)
Miscommunication
Some having no training and orientation

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Without discussion in AGM ,take decision on Bonus share(against Producer company
Act)

SUGGESTIONS
 Training about COMPANY ACT among BODs
 Orientation and training about vegetables business, practical problem
associated

CEO
Positive vibes

12 Yrs. experience in agro and allied sector


Good understanding and communication with Board of directors
Generating business ideas
Forward looking to expand business
Strategy for horizontal and vertical integration
Good communication with FIG Representatives
Transparency by price chart and custom hiring rate display

Concerns

High administrative work(like one man army)


HR Policies are absent( need skill full workers)
Members having very less knowledge about FPO and value of their share

Suggestions

HR policy should be strictly implement

C. AGM

VOTING RIGHTS

According to Reference Section 465(1) of the Companies Act, 2013


PART IXA of Companies Act 1956: PRODUCER COMPANIES
581D. MEMBERSHIP AND VOTING RIGHTS OF MEMBERS OF PRODUCER
COMPANY
(1) (a) In a case where the membership consists solely of individual members, the voting rights
shall be based on a single vote for every Member, irrespective of his shareholding or patronage
of the Producer Company.
So election for BODs and voting rights should be implemented immediately.

INFORMATION
Share the information to the members about AGM, and describe its importance. Should
consider other mode of electronic communication (messaging service) with formal letter.

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B. FPO’S BUSINESS ACTIVITY CONCERN

3.1. INPUT MARKETING


In Yagachifarmer Producer Company Limited the input marketing stared. They doing
well in suppling potato seeds with subsidizes prices.
AVAILABLITY
Limited types of farm inputs are only available in FPO. For good input business there
should be diverse input availability.
INFORMATION
The information about available input should be share to the members because maximum
members are not aware about any information regarding input outlets
DEMAND CREATION
There is no demand collected by FPO. The FPO should gather information about demand
of input in the area. The FPO should not be any push the input, which bad for business.
PRICE POLICY
Some input priced more than market prices. The FPO’s input price should not exceeds than
market prices.
ACESSIBLITY
Input outlet should be nearby, so transport cost is minimum for members. For reached
out all the members, the FPO should open multiple input outlets.(In some FIGs’ distance
from FPO is more than 20 kms.
3.2. CUSTOM HIRING
In custom hiring there is a high demand among members and non-members.
AVAILABLITY
Due to less no of farm machinery (Tractor), the availability of service is very less among
members. And there should privilege for members than non-members in custom hiring
service.
PRICE POLICY
The price is fair according to maximum members and it is less than private service

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3.3. OUTPUT MARKETING
INFORMATION
There are no knowledge among members about any output marketing. First the FPO should
share information about output marketing to members. Share proposal of marketing in
advance with member farmers.
DEMAND CREATION
The FPO should collect demand in regular basis to identify the opportunity to linkage
with members and market for higher profit.
INFRASTRUCTURE
The FPO should establish marketplace which have easily access by all members, if possible
multiple collection centre should open.
DIVERSITY
The FPO besides vegetables should concentrate on Maize crop, because maximum farmer
go for maize cultivation and sold to middleman.

3.4. CREDIT
Credit is a great tool for integrating and binding members, helping members in their
needs, actively interacts within FIG, some FIG already started, some are going to start, and
the FPO should explore the possibility of credit facility within the FIG by their own
leadership.

3.5. ACCESS TO GOVERNMENT SCHEMES


The maximum members are not aware about any Government schemes, so the FPO should
inform members about Government schemes in timely interval. The Government should
facilitate the benefits towards members through FPO only.

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4. FINDING AND DISCUSSION. (QUANTITATVE ANALYSIS)

4.1. DEMOGRAPHIC ANALYSIS:

Table.2. Particulars of Distribution of farmers (FIG) by Gender in the Producer


Company in detail

Distribution of farmers (FIG) by Gender in the


Yagachi Farmer Producer company Ltd. %
Male 88.7
Female 11.3
Total 100(150 members)

% GENDER DISTRIBUTION

11.3

88.7

Male Female

Fig 5. Gender distribution in the FPO

Within the sample area only 11.3% are female in the FPO, where maximum having no
land in their name, neglected their farm related potential. But some areas they started
credit facility by their own. They also have huge potential in mushroom cultivation,
vermicomposting. But the FPO should integrated those plan with local farm institution.

GREEN LOGISTICS PROJECT


Table.3. Particulars of Distribution of farmers (FIG) by Caste in the Producer Company
in detail

Distribution of farmers (FIG) by Caste in the Yagachi


Farmer Producer company Ltd. %
SC 20.0
ST 0.7
OBC 77.3
General 2.0
Total 100(150)

%Distribution of farmers by Caste

2%
20%
1%

77.3, 77%

SC ST OBC General

Fig 6. Caste distribution in the FPO

In the FPO the OBC and lingayath are dominated, some of SC farmer are complained
about neglecting the backward caste in various aspects, so there should be diversity in
BODs from various caste.

GREEN LOGISTICS PROJECT


Table.4. Particulars of Distribution of farmers (FIG) by Education in the Producer
Company in detail

Distribution of farmers (FIG) by Education in the


Yagachi Farmer Producer company Ltd. %
Illiterate 20.0
1 to 7th std 22.7
8 to 10th std 37.3
PUC 8.0
Degree 6.7
Diploma or ITI 1.3
PG and Above 1.3
No information 2.7
Total 100(150)

%Distribution of farmers by Education


40

35 37.3

30

25

20 22.7
20
15

10

5 8
6.7
1.3 1.3 2.7
0
Illiterate 1 to 7th std 8 to 10th std PUC Degree Diploma or PG and No
ITI Above information

Fig 7. Education of the farmer in the FPO

In the FPO 80% farmer are educated below or up to 10th. Even some BODs are lack in
education. It does not mean they don’t have any farm related knowledge. They are
educated in their field but unaware about FPO and other company related knowledge.

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4.2. INSTITUTIONAL PERFORMANCE ANALYSIS

Table.5. Particulars of Distribution of farmers (FIG) by year of joining in the Producer


Company in detail

Distribution of farmers (FIG) by year of joining in FPO


(Yagachi Farmer Producer company Ltd.) %

2015 8.0
2016 4.0
2017 86.7
No information 1.3
Total 100(150)

%Distribution of farmers by year of joining


No information 2015
1% 8% 2016
4%

2017
87%

2015 2016 2017 No information

Fig 8. Year of joining of the farmer in the FPO

The maximum farmers joined the FPO in 2017

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Table.6. Particulars of Distribution of farmers by awareness of role and responsibility of
FIG in the Producer Company in detail

Distribution of farmers (FIG) by whether they are


aware of role and function of FIGs in the Yagachi
Farmer Producer company Ltd. %
Yes 36.0
No 64.0
Total 100(150)

% AWARNESS

36

64

Yes No

Fig 9. Awareness of role and responsibility of FIG in the FPO

64% member having no awareness about FIGs role and responsibility, to run the FPO as a
successful business entity there should be a major damage control in the grass root level by
either the FPO or government.

GREEN LOGISTICS PROJECT


Table.7. Particulars of Distribution of farmers (FIG) by statements on whether regular
meetings are conducted in the Producer Company in detail

Distribution of farmers (FIG) by statements on whether


regular meetings are conducted in the Yagachi Farmer
Producer company Ltd. %
Yes 28.0
No 71.3
No information 0.7
Total 100(150)

%Distribution on whether regular meetings are conducted

1%

28%

71%

Yes No No information

Fig 10.Distribution on whether regular meetings are conducted in FIG in the FPO

According to 71% members there are no meeting within the FIGs. Which is a major
concern, because the FIG meetings are the major source for information, demand creation
and awareness. The FPO should follow these meetings through FIG representative.

GREEN LOGISTICS PROJECT


Table.8. Particulars of Distribution of farmers (FIG) by their statements on type of
benefits received in the Producer Company in detail

Distribution of farmers (FIG) by their statements on type of


benefits received from Yagachi Farmer Producer company Ltd.
%
Input supply 14.7
Input supply & Custom
9.3
hiring
Custom hiring 6.7
None 69.3
Total 100(150)

%Distribution of which type of benefits


received

14.7
9.3

6.7

69.3

Input supply Input supply & Custom hiring Custom hiring None

Fig 11. Distribution of which type of benefits received by the farmer in the FPO

According to members approx. 70% are not received any benefits from FPO. And some
non-members received benefits. The FPO should minimize this ratio to grow as a
business.

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Table.9. Particulars of Distribution of farmers by how were informed of the date of the
AGM meeting in the Producer Company in detail

Distribution of farmers (FIG) by how were informed of


the date of the AGM meeting in the Yagachi Farmer
Producer company Ltd. %
Beforehand 28.7
At a short notice 22.7
No meeting was held 46.7
Do not know 2.0
Total 100(150)

%Distribution of farmers by how were


informed of the date of the AGM

2, 2%
28.7, 29%
Beforehand
46.7, 46%
At a short notice
No meeting was held
22.7, 23%
Do not know

Fig 12. Distribution of farmers by how were informed of the date of the AGM
meeting in the FPO

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Table.10. Particulars of Distribution of farmers by how they were informed about the
agenda for AGM meeting in the Producer Company in detail

Distribution of farmers (FIG) by how they were informed


about the agenda for AGM in the Yagachi Farmer Producer
company Ltd. %

Beforehand 14.0

Briefed only at the


beginning of the meeting 27.3
No meeting was held 46.7
Do not know 3.3
No information 8.7
Total 100(150)

%Distribution of farmers by how they were


informed about the agenda for AGM
8.7 14
3.3

27.3

46.7

Beforehand Briefed only at the beginning of the meeting


No meeting was held Do not know
No information

Fig 13.Distribution of farmers by how they were informed about the agenda for
AGM

According to members statements 46.7 % members having no knowledge about any AGM
which is direct violation of Producer Company ACT. To rectify those problem, the FPO
should establish strong communication channel and scientific method and technology.

GREEN LOGISTICS PROJECT


5. CONCLUSIONS:
As a young business entity the FPO having great potential in input marketing, custom
hiring, and output marketing. But there was some fundamental and serious concerns
associated with above segments like communication disruption, non-compliance of
producer company act, conflict of interests and awareness. For rectify those problems the
FPO and government should start grass root awareness among members and facilitate
scientific method for compliance of act among all stake holder.

GREEN LOGISTICS PROJECT

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