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Member's Corner

Frequently Asked Questions (FAQs)

1. What is a Producer Organisation (PO)?

A Producer Organization (PO) is a legal entity comprised of primary producers, such as farmers, milk producers, fishers, weavers, rural artisans, and craftspeople. A PO can be a producer corporation, a cooperative organisation, or any other legal entity that allows members to share profits/benefits. Institutions of primary producers can also become members of PO in specific forms, such as producer companies..

2. What is the need for PO?

The primary goal of PO is to provide greater remuneration for producers through their own organisation. Small producers do not have the volume (both inputs and output) to profit from economies of scale. Furthermore, in agricultural marketing, there is a long chain of intermediaries that frequently work in a non-transparent manner, resulting in a situation in which the producer receives only a small portion of the value that the eventual customer pays.

Primary producers can profit from economies of scale through aggregation. They will also have more bargaining power in comparison to large buyers of produce and suppliers of inputs.

3. What is a “Farmers' Producer Organisation” (FPO)?

It is a form of PO with farmers as members. The Small Farmers' Agribusiness Consortium (SFAC) is assisting in the promotion of FPOs. PO is a generic term for an organisation of producers of any type of production, such as agricultural, non-farm products, artisanal products, and so on.

4. Can there be a PO for non-farmers?

Yes. The PO is a primary producer organisation. If the commodity in question is not grown on a farm (for example, handloom or handicraft), the PO will be that of non-farmers.

The PO's goal is to improve income realisation for its members (who are producers) through aggregation and, if possible, value addition.

5. What are the essential features of a PO?

It is composed of a collection of producers who engage in either farm or non-farm activities.
It is a legal entity and a registered body.
Producers are members of the organization's board of directors.
It is concerned with business activities pertaining to the principal produce/product.
It works for the advantage of the producers who are members.
A portion of the profit is distributed to the producers.
The remainder of the surplus is added to the company's own funds for business expansion.

6. Who owns the PO?

The members of the PO own the organisation. It is a producer-led association run by producers, for producers. One or more institutions and/or individuals may have helped to promote the PO by assisting with mobilisation, registration, business planning, and operations. However, ownership control is always with the members, and management is done through the members' representatives.

7. Who provides support for the promotion of PO?

Government departments, Non-Profits organisations, corporations, and domestic and international aid agencies provide financial and/or technical assistance to the Producer Organization Promoting Institution (POPI) for promotion and hand-holding of the PO. Each agency has its own criteria for selecting the project/promoting institution to sponsor.

8. What are the important activities of a PO?

The primary producers are skilled and experienced in the field of production. However, they often need support to market what they make. The PO fills in the gaps and assumes responsibility for any one or more operations along the value chain of the product, from raw material acquisition to delivery of the final product to the end consumer's doorstep. In a nutshell, the PO might do the following things:

Input procurement
Market information dissemination
Technology and innovation dissemination
Input finance facilitation
Produce aggregation and storage
Primary processing such as drying, cleaning, and grading
Branding, Packaging, Labeling, and Standardization
Quality control
Marketing to institutional buyers
Participation in commodity exchanges
Export

9. What is FDRVC?

Foundation for Rural Value Chain Development (FDRVC) is a recognised National Support Organisation that provides implementation support for value chain interventions. It is a Technical Support Agency that has taken on the project of promoting Badayuni MKPCL by providing professional market linkage and operations management support.

10. Does FDRVC take on independent projects or work with the already existing FPOs to provide them with professional support?

FDRVC is currently focusing on its mandate, researching opportunities, and establishing new FPOs, but in the coming years, it will be able to help additional independent projects and existing producer organisations.