About the Company

Founded in the year 1995 as a non-profit organization, this FPO Facilitator is located at Virudhunagar in Madurai district of Tamil Nadu. Its primary objective is to assist SHGs (Self Help Groups) to uplift its members. At its Madurai branch, member farmers are engaged in cultivating maize, while at its Coorg & Kushal Nagar branches, members grow coffee.

The FPO Facilitator has been facilitating farmers to form Farmer Producer Organisations (FPOs) for efficient utilisation of resources and to benefit from different government schemes and banking facilities since 2013.

Challenges Faced

The farmer members of FPO Facilitator were facing pre-harvest cash flow issues for input purchase. The purchases were on credit, which meant that the farmers lost out on the price discounts that were available for cash purchases, thereby increasing the cost of production.

Intermediation Solutions and Advisory Services by Samunnati

The FPO Facilitator approached Samunnati to fund its farmer members’ input purchase. Samunnati, through its non-traditional approach of risk assessment and in line with its genetic code, provided financial and non-financial solutions to the farmer members.

Initially, 10-15% of farmer members were provided financial support to purchase inputs, fertilizers & technology to grow crops like maize. On completion of timely repayment for the first season, the commercial facility was extended to more member farmers. One FPO set up input shops to aggregate members’ input demand, thus increasing their bargaining power with the manufacturers.

In parallel, as part of its advisory services, Samunnati also conducted a series of training programs for the farmers to help create awareness about the benefits of being shareholders of an FPO, and the benefits they can avail from various credit and insurance schemes of the government.

This resulted in nearly 2,200 member farmers enrolling their 4,200 acres of land for the Pradhan Mantri Fasal Bima Yojana in 2016. The members were able to tide over the drought during the year with the help of an insurance claim settlement of Rs. 9.13 crores. This entire activity and support gained other farmers’ confidence on the FPO concept and in the work, the FPO Facilitator (NGO) was doing. This resulted in more than 4,100 farmers becoming new FPO members within a short span of time.

Likewise, farmers in the Coorg area who were selling coffee to local aggregators at prices lower than the market were able to leverage the power of aggregation and collective bargaining by associating with the FPO Facilitator and its FPOs.

Post Samunnati’s intervention, all 11 FPOs promoted by FPO Facilitator have opened input shops and provided inputs to farmers at lower prices. The overall membership base increased from 7 FPOs with 7,000 members to 11 FPOs with more than 8,000 members. Additionally, more than 75% of FPO member farmers enrolled under the PMFBY for crop insurance and Rs 33.30 crores got sanctioned by PMFBY as claim settlements directly to farmers’ accounts. Market linkage was provided to the member farmers by aggregating their produce and selling them directly to processors, thereby eliminating middlemen.

The impact of Samunnati’s intervention is demonstrated by the increase in member base as well as the enrollment in the PMFBY due to our advisory services. Samunnati is confident about engaging further with the FPO Facilitator and its FPOs. We will carry forward learnings from this partnership to help more farmers and FPO members across other geographies.