Farmers Business Groups: Livelihood Solution to Cotton Seed Producers

Cotton seed production is a labour intensive industry requiring on an average 10 skilled workers per acre particularly during emasculation and pollination. It requires substantial investment and takes nearly 10 months for return. It also needs proper intervention of technology, management and training to make it profitable. Aiming at this, an initiative was taken under National Agricultural Innovation Project (NAIP) sub-project on ‘Livelihood and Nutritional Security of Tribal Dominated Areas through Integrated Farming System and Technology Models’ at Maharana Pratap University of Agriculture and Technology (MPUAT), Udaipur, Rajasthan. It led cotton seed producers to the prosperity in Rajasthan. With the efforts of NAIP, Dungaria Agro Producer Company Limited (DAPCL), Mewara, Dungarpur was established as a registered Producer Company.

DAPCL Associated Farmers

Using self-help principles DAPCL created 41 Farmers Business Groups (FBGs) comprising 622 members and helped in facilitation of savings and enhancing the aggregation of farmer surpluses to generate marketing power. It conducts training and capacity building sessions in 10 villages of the Dungarpur District. Producer Companies (PCs) associated farmers in Banswara and Dungarpur districts of Rajasthan in collaboration with ACCESS Development Services. The main objective of PCs is to collectively procure and market farm produce and to ensure better margins to the farmers.

Partnership with Agro Company

DAPCL signed an agreement with Agro Company based on Himmatnagar, Gujarat to enhance the productivity of cotton seed. It ensures cost transparency, defines a payment schedule, promises regular technical support and uses a collective approach for reducing overall input costs. After this partnership, the number of farmers and the cotton seed production of DAPCL increased significantly. In 2010-11 only 42 farmers were associated but in 2012-13 this number reached up to 287. DAPCL’s target is to associate 1,000 farmers in 2014-15.

Both the Parties are Benefitted

The major sources of revenue of DAPCL are collective input supply, cotton seed production, collective marketing and providing technical farm services. Through these business verticals, company provides pertinent services to the farmers and generates margin to manage its operations cost. The turnover of DAPCL was Rs. 9.51 lakh in 2010-11, Rs. 25.78 lakh in 2011-12 and it reached Rs. 66.44 lakh in 2012-13. Through the partnership with various Agro Companies, farmers save on inputs required for seed production. They are getting the inputs at least 20 percent lower than the market prices. Successful implementation of this model in Dungarpur district by MPUAT and ACCESS Development Services has increased farmers’ income. The average net income of a farmer since 2010-2013 from 0.1 hectare of land is Rs. 15,168. This is 39% higher than the net income before implementation of NAIP. It is expected to go up to Rs. 19,846 by 2014-15.

Harilal joined Producer Company

Hari Lal (52) from Vatada village had been involved in cotton seed production for last ten years. He joined DAPCL in 2010-11. Since then he has been being benefited from increased transparency of numerous transactions. Most of the spending he was previously subjected to are now being borne by DAPCL. Major gains include fixed payment terms, burdensome transportation and ginning costs shifted to DAPCL, and extensive monitoring of cotton plots through the support of Agriculture University.

Works on Self-Help Principles

The Board of Directors, President and Secretary of FBGs are serving as technology agents and acting as bridge between institutes like KVKs and Producer Company for collective input supply and output marketing. The project covers 78 villages in 10 clusters in four disadvantaged districts namely Udaipur, Banswara, Dungarpur and Sirohi. The project aims at doubling the income of farmers in three years by adoption of economically viable integrated farming system models and technologies. This was further tied up with the market by providing adequate facilities and roping in a private sector to help them negotiate and get better price for their produce by organizing farmers’ clusters into Farmers Business Centers with self help principles under a Producer Marketing Company.

(Source: NAIP-Mass Media Project, DKMA with inputs from MPUAT, Udaipur and DMAPR, Anand)