Thousands of FPOs have been registered across India, covering diverse crops and regions, and have made significant progress in transforming the lives of farmers. FPOs address the complex issues smallholder farmers face, empowering them with a unified platform to overcome individual limitations. Through aggregation, farmers secure fair prices and improved incomes. The collective procurement of inputs reduces costs and enhances efficiency.
The current status of FPOs in India is promising. FPOs have facilitated market linkages, enabling farmers to access domestic and international markets. Additionally, FPOs have facilitated access to credit and financial services, empowering farmers to invest in farm infrastructure, adopt new technologies, and expand their operations. However, challenges persist in maximizing the potential of FPOs. Limited access to capital and financial services hampers their growth and scalability. Establishing robust market linkages and value chains remains a complex task due to inadequate infrastructure and excessive competition.
Unconventional competitive landscape of FPOs
In the competitive landscape that Farmer Producer Organizations (FPOs) operate in, innovation plays a crucial role in providing them with a competitive advantage. FPOs face competition from various players in different aspects of their operations, such as input procurement, output procurement, and value-addition activities.
When it comes to input procurement, FPOs encounter competition from established input dealers and distributors. These businesses, often run by second or third-generation entrepreneurs, have already established trust with farmers. Similarly, in output procurement, competition presents itself in the form of traders and wholesalers in nearby towns who often possess greater financial resources. Value addition is another area where innovation becomes crucial for FPOs. With their resources and established brands, FMCG companies often dominate the value-addition segment.
Foster learning and innovation among FPOs
By embracing innovation, FPOs can create a competitive advantage that allows them to thrive in the market. They can differentiate themselves by offering unique products, establishing strong relationships with consumers, and building a reputation for quality and reliability. Innovation also enables FPOs to adapt to evolving market trends, consumer preferences, and regulatory requirements, ensuring their long-term viability and sustainability. For this, FPOs can engage in in-house and cross-functional learning. In-house or organic learning refers to learning that occurs within the FPO itself, primarily through internal resources, expertise, and experiences. While this approach can be valuable, it may have limitations in terms of exposure to diverse perspectives, new ideas, and external best practices. This is where cross-functional learning comes in. Cross-functional learning emphasizes practical experiences and real-world applications. There are two effective ways to foster cross-functional learning among FPOs. One is a federation of FPOs and the other is platform-based learning.Federation of FPOs
Establishing FPO federations promotes cross-functional learning through collaboration, knowledge sharing, and collective learning. These platforms enable FPOs to leverage their collective expertise, experiences, and resources for enhanced learning. Regular meetings, workshops, and joint projects facilitate the exchange of ideas, and best practices, and address common challenges. This collaborative approach fosters innovation, builds stronger networks, and strengthens the overall capacity of FPOs. Additionally, FPO federations mitigate internal competition and enhance market presence by pooling resources and expertise under a common brand name. This allows them to engage in direct marketing, negotiate better deals, achieve economies of scale, and attract larger buyers, processors, and retailers.
The example of the Maha FPO Federation in Maharashtra demonstrates the positive impact of such federations. The federation is involved in procuring onion, gram, tur, maize, and soybean. The FPO federation serves as a platform for capacity building and business sustainability and organizes webinar consultations with practitioners and experts to shed light on the opportunities and challenges faced by FPOs. By a platform approach, these experts engage with FPOs and provide context-specific training tailored to their unique needs and challenges. This decentralized training model ensures effective learning and development for FPOs.
Platform-based Learning
Cross-functional learning within FPOs can also be facilitated through platform-based learning. The FPO Gateway platform, developed by Samunnati, is a prime example, connecting over 5500 FPOs. Each FPO is assigned a unique ID on the platform, enabling digitization of member farmers’ data, and cropping patterns, and fostering cross-functional learning. By digitizing data, FPOs can access comprehensive information, make data-driven decisions, and improve agricultural practices. The platform also allows FPOs to initiate robocalls for effective communication and timely updates. Moreover, digitized bookkeeping and automatic consolidation of financial data streamline financial management, improve efficiency, and provide better insights into financial performance. Moreover, FPO Gateway enables FPOs to view profiles of other FPOs, promoting knowledge sharing, exchange of best practices, and collaboration. Learning from each other’s experiences enhances operational efficiency and drives innovation.
In conclusion, FPOs play a pivotal role in empowering smallholder farmers and addressing the complexities of the agricultural sector. They have made significant progress in improving farmers’ lives, but challenges persist. Through a culture of learning and innovation, FPOs can overcome these challenges, maximize their impact and create a sustainable future for farmers. By embracing innovation, FPOs can adapt to changing market dynamics, optimize their operations, and transform the agricultural landscape in India. The journey towards a prosperous agricultural sector relies on the continuous learning, innovation, and collaborative efforts of FPOs, farmers and all stakeholders involved.
The writer is Founder & CEO, Samunnati
