COIMBATORE: India needs at least one lakh farmer producer organizations (FPOs) to cater to its 14 crore farmers, said NABARD chairman G R Chintala while talking about how collectivization of farming has become the norm for growth in the agriculture sector.
Speaking at the inauguration of the 80th annual conference of the Indian Society of Agricultural Economics at Tamil Nadu Agricultural Society at TNAU, Wednesday, he said the government had given NABARD a target of forming 10,000 new FPOs over the next four years. He added that while 10,000 was a good starting point, it was not enough for the 86% of small and marginal farmers in the country.
Chintala provided some data on the need for collectivization. He said India has around 12.6 crore small and marginal farmers cultivating around 7.4 crore hectares out of the total 16.4 crore hectares under cultivation.
“This works out to an average land size of 0.58 hectare per farmer, which is too small to even bring one machine in,” said Chintala. “However, when they join registered FPOs, they enjoy pool access to markets, schemes, and credits”.
He added that there are already around 8,000 FPOs, of which 4,868 FPOs are funded by NABARD and the access to credit, also reduces their dependence on private finance, thus enjoying lower interest rates.
Chintala said they already had 4,868 FPOs attached to NABARD. “During our survey, we found farmers' benefits increased by 20% to 40% after joining FPOs, because they get inputs on large scale, thus at dealer prices with dealer commissions. They eliminate middle-men are marketing stages also,” he said.
“They can also afford to hire machinery and add value to their products, like converting black gram into dal, which increases their price from Rs 36 per kg to Rs 100 per kg,” said the Chairman.
Based on this data, the government had fixed a target for NABARD to create 10,000 FPOs over the next four years. “Credit is also a requirement for farmers. The government had fixed a target of providing a credit of Rs 15 lakh crores during 2020-21, of which Rs 12 lakh crore has already been distributed. The next financial year, the target has been increased to Rs 16.5 lakh crores,” he said.
Speaking on the importance of agriculture, the apex bank chairman, said while the economy itself was contracting at between 23% and 7%, agriculture this financial year has grown by 4%. “However, due to multiple problems faced by the sector, a survey found that 40% of our farmers do not want to continue in agriculture. This is suicidal because it means no food. We have to ensure our farmers stay in agriculture,” he added.