FPOs movement: market economy versus political economy, which will last?
Even though politicians in Maharashtra are setting up FPOs in the names of their cronies, farmers and organisations involved in the FPO movement say that these organisations won’t last because the market economy will win out over the political economy in this movement.
‘Leaders from both parties are interested in FPO formation for their party workers. FPOs are being set up so that government agencies can get contracts to buy goods from them.’ In fact, traders and politicians are working together to take over the movement,’ says Seema Narode, the leader of the Shetkari Sanghatana, which is the state’s biggest group of farmers.
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Ifran Sheikh, who is in charge of Sahyadri Balaghat FPC, says that politicians are telling their supporters to start FPOs so they can start procurement centres and get government subsidies. ‘Most party workers don’t know what the FPO rules and regulations are. Also, these FPOs will not keep going. There are 350 FPOs in Beed district, but only three or four are doing well,’ he said. He also said that FPOs that have clear goals and focus on the market will last.
Political economy
Yogesh Thorat, the Managing Director of MahaFPC, a group of Maharashtra farmer-producer companies, says that politicians are trying to use FPOs as a way to get people to support them. ‘But I think the political economy will lose out to the market economy. If you do business with the government, you can take advantage of their power. This is not possible in a value chain that is specific to a single good. Now, the government’s role is restricted as a regulator,’ said Thorat. He also said that FPOs that can compete will stay in business.
A farmer from Sangli named Ashok Jadhav says that politicians have destroyed the cooperative movement and are now trying to take over the FPO space. ‘Politicians are afraid that farmers won’t listen to them if they start their own business and form their own company. Politicians care about how much farmers depend on them. Farmers shouldn’t let politicians ruin the FPO movement,’ he said.
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The Centre’s guidelines say that FPOs should be built in groups. Produce from agriculture and horticulture is grown and raised to take advantage of economies of scale and give members better access to the market.
Implementing agencies, which are in charge of setting up and promoting FPOs, also get cluster-based business organisations (CBBOs) to help set up FPOs and give them professional help for five years.
So far, IAs have been given 8,716 produce clusters to start FPOs. So far, 3,179 FPOs have been registered across the States. Up until March 2022, about 569 FPOs had been set up in Maharashtra.
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